ECONOMY

An insurance powerhouse

The merged insurance operations of the National Bank of Greece (NBG) and Alpha Bank are expected to control 25 percent of the market, the general manager of National Insurance told a gathering of the company’s agents and brokers early this week. The two banks announced plans to merge in late October, saying that the move will equip them with the size and the scale to compete in a competitive international and European market. While integration costs are projected at 220 million euros, the banks said the combined operation will benefit from cost synergies of 200 million euros, an estimate which does not include tax incentives provided by the government to encourage mergers. The merger is projected to be completed in the first half of 2002. Constantinos Filippou, general manager of National Insurance, a subsidiary of NBG, said the insurer will see its market share jump to 25 percent following its integration with Alpha Bank’s insurance unit. National Insurance is currently the market leader, with a share estimated at slightly below 20 percent. Alpha Insurance has a market share of some 4 percent. Based on 2000 results, the two companies had general premiums of about 108 billion drachmas and life premiums of some 86 billion drachmas. Filippou said that profits this year are expected to see a significant contribution from organic growth. Last year, insurance companies reported a sharp impact on results due to the prolonged stock market slump. The National Insurance head also stressed the company’s efforts to contain operating costs. He said the adoption of new technology this year has already helped bring expenses down by 3 percent. Sales Manager Vangelis Triantafyllou said the accumulative increase in premiums, up by 45 percent over the period 1998 to 2001, was principally due to agents’ hard work. Referring to the growing importance of insurance intermediaries, Filippou said that 90 percent of the company’s production presently comes from this group. Separately, Alpha Insurance yesterday reported profits of 661 million drachmas in the first nine months of the year, with the increase due principally to organic growth. Total premiums were up by 7 percent to 24.1 billion drachmas. Life premiums rose by 21.5 percent to 11.1 billion drachmas while new life premiums increased by 22 percent. General insurance premiums amounted to 13 billion drachmas. Alpha Insurance said general insurance currently account for 32 percent of total premiums, down from 34 percent, following the company’s efforts to reduce its presence in this loss-making sector.