Greece’s private insurance sector that was largely damaged by the five-year recession seems to attract foreign investment.
With significant loss of jobs, the private insurance sector lost 22% of its turnover, from 5.2 billion euros at the end of 2008, fell to 4 billion by the end of 2013.
However, the negative economic climate has started to change. Foreign investors have expressed interest in the Greek insurance sector as they see significant recovery prospects.
As stakeholders admit, the main reason the private insurance sector is recovering is that the welfare state has collapsed. State expenditure for pensions, pharmaceutical spending, welfare benefits and other health benefits have been cut by 13 billion euros (50 billion euros in 2009 to 37 billion in 2013).
Thus, the private insurance market is expected to cover this gap. Insurance companies in Greece have seen an annual growth of 20%. The rise of the private insurance sector is also due to the Greek government’s inability to fund the pension system and the high numbers of unemployment.
The Greek automobile insurance sector is not experiencing losses any more as there is a reduction of traffic accidents and the market is considered as one of the most lucrative. The mandatory insurance coverage of approximately 500,000 uninsured cars will make it even more lucrative.
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