Boston, MA -- (ReleaseWire) -- 01/09/2014 -- The news flow and data from Greece's insurance sector highlights three key themes. First, the economic crisis has finally had a (brutal) impact on the non-life segment. Second, premiums in the life segment have held up remarkably well until the end of 2012. Third, the consolidation of Greece's banking sector is something of a wildcard, and may bring around a consolidation among insurance companies as well.
Key Insights And Key Risks
As of late 2013, it is clear that conditions remain grim for many of the players in Greece's embattled insurance sector. An earlier boom in sales of investment-linked products reversed during H113, with a result that revenues plunged by 49% to just EUR106mn. Premiums from traditional life policies dropped by 7%. It is no longer correct to describe the segment as resilient.
In the non-life segment, price discounting in the competitive markets for auto-related lines is the key issue. Premiums for both CASCO and CTMPL fell sharply in H113 relative to H112. However, a number of other non-life lines - such as covers for fire and other natural perils - actually rose.
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A new wildcard emerged in Q412 and remains relevant: this the movement by Greece's troubled banking sector towards a wholesale consolidation. The takeover bid by National Bank of Greece for Eurobank is a classic example of this. It remains to be seen what will be the final implications for the insurance companies that both parties own. A consolidation of the insurance sector would probably be good news, in that it would provide greater economies of scale and, for some players at least, more pricing power.
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