The Greek insurance industry is showing sure signs of a recovery from the economic downturn of the past two years – largely as a result of restructuring initiatives – but the general climate still warrants caution. Ethniki General Insurance (EGI) company, the subsidiary of the National Bank and the country’s largest, expects to post earnings of 18 million euros for 2003, based on first-half results. Although it was the only one among the sector’s listed firms that did not report losses in the last few years, it nevertheless sustained a serious blow as a result of the falling values of its stock and holdings. Having boosted capital assets by 60 million euros, EGI now has indemnity reserves about double the minimum; a further rise in stock market values will allow it to register capital gains in its portfolio. Emporiki Bank’s Phoenix Metrolife is another of the sector’s big insurance players projected to post a return to profitability as of next week; but the approximately 200,000 euros profit it expects is no sure sign of recovery; this will have to wait for confirmation after the end of the year. The planned 35-million-euro capital boost and the issue of a 15-million-euro bond, scheduled for September, should allow the firm to meet its indemnity reserve minimum. Interamerican, the country’s second-largest insurance firm which is no longer listed on the Athens bourse after its acquisition by Eureko, is regarded as a sector bellwether and its results are anticipated with interest. After successive years of losses, Interamerican is expected to report a first-half profit of around 30 million euros, partly as a result of selling a large chunk of its bond portfolio when prices were rising. Sources say the improvement can be well retained for the whole of the year if combined with costcutting measures and an upbeat stock market.