The general insurance sector expects one of the toughest years since the combination of the crisis in the car market and the liquidity problems boost scenarios for an upcoming concentration. Market circles believe that the recent acquisition of Eurosure by Minerva shows the path that the general sector will follow in the next few years, which is also urged to be in line with the capital requirements of Solvency II.
According to latest figures, the general sector grew by 5.6% in the first nine months of 2009, with premiums reaching €311 million from €294 million in 2008.
44% of the premiums in the general sector concern car insurance, 25% fire insurance and 21% heath.
Despite the increased premiums, hundreds of general sector insurance companies in Cyprus face an exceptionally difficult economic environment.
“The insured reduce the insured sums and move towards third party insurances. Month by month, the number of the unpaid premiums by both companies and individuals goes up”, General Manager of Laiki Insurance, Andreas Stylianou told SockWatch.
General Manager of Cosmos Insurance, Costas Leontis agreed that there is a difficulty in the payment of premiums, which “passes through the representatives who cannot collect the sums and – by extension – cannot pay the companies”.
The economic challenges of the general sector include the increase in claims in 2009, which signals an increase in premiums too.
“The increased cost from the increased claims imposes an increase in premiums. The insurance companies, however, are concerned due to the pressure in the market”, Manager of Atlantic Insurance, Andreas Pirisiis said.
“Each company will face its problems in its own why in this difficult period. A small market like Cyprus has 31 insurance companies, as many as Germany has”, he added.
Other significant challenges in the sector entail the change of the regulatory framework with the enforcement of Solvency II.
Mr. Leontiou believes that the companies with small market shares will not be able to survive due to Solvency II. “They will be forced either to merge with others or to close”, he said.
Mr. Stylianou, who is Chairman of the committee of the Insurance Companies Association for Solvency II, made clear that the changes must be drastic.
“Therefore, I expect that the companies that will not be able to make the required changes either will be forced to sell their company to another or will proceed with mergers to create the critical mass they need to deal with the new environment”, he concluded.
According to latest figures, the general sector grew by 5.6% in the first nine months of 2009, with premiums reaching €311 million from €294 million in 2008.
44% of the premiums in the general sector concern car insurance, 25% fire insurance and 21% heath.
Despite the increased premiums, hundreds of general sector insurance companies in Cyprus face an exceptionally difficult economic environment.
“The insured reduce the insured sums and move towards third party insurances. Month by month, the number of the unpaid premiums by both companies and individuals goes up”, General Manager of Laiki Insurance, Andreas Stylianou told SockWatch.
General Manager of Cosmos Insurance, Costas Leontis agreed that there is a difficulty in the payment of premiums, which “passes through the representatives who cannot collect the sums and – by extension – cannot pay the companies”.
The economic challenges of the general sector include the increase in claims in 2009, which signals an increase in premiums too.
“The increased cost from the increased claims imposes an increase in premiums. The insurance companies, however, are concerned due to the pressure in the market”, Manager of Atlantic Insurance, Andreas Pirisiis said.
“Each company will face its problems in its own why in this difficult period. A small market like Cyprus has 31 insurance companies, as many as Germany has”, he added.
Other significant challenges in the sector entail the change of the regulatory framework with the enforcement of Solvency II.
Mr. Leontiou believes that the companies with small market shares will not be able to survive due to Solvency II. “They will be forced either to merge with others or to close”, he said.
Mr. Stylianou, who is Chairman of the committee of the Insurance Companies Association for Solvency II, made clear that the changes must be drastic.
“Therefore, I expect that the companies that will not be able to make the required changes either will be forced to sell their company to another or will proceed with mergers to create the critical mass they need to deal with the new environment”, he concluded.
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