Greece Insurance Report Q1 2016
BMI View: Greece's insurance sector will be faced with significant challenges over the coming years as thecountry's economic crisis continues to undermine demand for personal and corporate lines. Weakhousehold spending will remain a primary obstacle for the majority of insurers, particularly providers ofperceived non-essential covers including life and health insurance products. Amid intense price pressuresour expectations are for premiums to grow at a fairly modest pace despite coming from a low base. Whilegrowth will begin to pick up towards the end of the forecast period, we expect there to be relatively fewopportunities for companies to grow their business. On the other hand, continued divestment by localinsurers may create a window for new entrants.
Recent Updates And Developments:
We have revised a number of our premiums growth forecasts for this quarter following furtherdowngrades to our economic outlook for the country. In the life segment we forecast premiums to growby just 0.6% a year on average over 2015-2019 in EUR terms, translating to a contraction of 1.2% y-o-yin USD terms. Growth in non-life premiums will also be weak, with premiums se to grow by 1.6% overthe period in EUR terms and to decline by 0.1% y-o-y in USD terms.
In December 2015, it was reported that banking group NBG was poised to sell at least 75% of its stake inEthniki Insurance as part of a planned divestment of the group's non-banking activities. The companywill also reportedly sell its share in Turkish insurance company Finansbank as well as two otherunnamed overseas assets. The move reflects the continued fragility of Greece's financial sector and thelimited access to capital of the country's banks.
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