EAEI: Alarm Bells Ringing for Losses, Capital Shortages, and Natural Disasters

The Greek insurance market is at a critical juncture as persistent increases in operational costs and significant losses across all sectors are raising serious concerns about its sustainability. This was highlighted during the annual meeting of the Union of Greece (EAEI), which concluded yesterday (May 23, 2025) on the island of Hydra. Representatives from major insurance companies warned of the need for immediate interventions in health and automotive insurance, as well as addressing natural disasters that have intensified in recent years to ensure the stability of the insurance sector. Specifically, natural disasters have seen an annual increase of 5% to 6% over the past 30 years, further emphasizing the need for insurance coverage. In the automotive insurance sector, pressures are mounting due to rising costs of spare parts and repairs. Additionally, high claims remain a concern, intensifying the need for premium adjustments. Notably, in 2024, damages amounted to €350 million, with insurance companies covering approximately €150 million. However, results from the first quarter of 2025 for major insurance firms were positive. ‘The international insurance industry will endure, just as the Greek market has,’ stated Nikolaos Makropolis, President and CEO of Europe Insurance, during a press conference. Starting June 1, 2025, businesses with an annual turnover exceeding €500,000 are required to have insurance coverage for damage caused by natural disasters such as floods, fires, and earthquakes, covering at least 70% of their assets. Currently, only 40% of these businesses are covered, leaving a significant percentage exposed to risks. According to Mr. Makropolis, mandatory vehicle coverage against natural disasters could expand market offerings and enhance public insurance awareness. In the health sector, key factors influencing premiums include the high cost of medical services, technological advancements, increased life expectancy, and Solvency II framework requirements. As noted by Allianz Greece’s Managing Consultant, Vasilis Christidis, these elements exert constant pressure on insurance companies, necessitating annual premium adjustments. Insurance companies decided to keep prices stable for 2025. ‘We do not want to increase insurance premiums,’ remarked Panos Dimitriou, Managing Consultant of Generali Greece, adding that ‘the Greek consumer lacks the purchasing power of the Swiss, yet faces comparable costs.’ Dimitriou also warned that if billing increases fail to cover rising costs, ‘these funds currently do not exist, and I don’t know how they will be found.’ To address healthcare costs, measures like implementing DRG’s (Diagnosis Related Groups) and increasing available beds in Attica through new investments and public-private partnerships (PPP) with insurance companies are necessary.