With first-half results showing the impact of the prolonged stock market downturn on their performance, the insurance industry is closely monitoring developments at the stock exchange. The course of the second half of the year will determine the fate of insurance companies this year. One insurance executive noted that the industry could suffer a serious blow this year if the stock market does not improve. The problem is evident from first-half results, with some insurance companies reporting losses due to stock market activities which in turn dented life insurance premiums. The latter is associated with unit-linked products which are tied to the course of investment capital. Insurers have not done so well in the first half of the year. Aspis Pronia, for example, reported losses of 9.2 billion drachmas and the restructuring of its activities. The insurer appraised its share portfolio at the current value and found a 10-billion-drachma loss. Company executives are concerned that the negative result could force Aspis Pronia to increase its share capital if the situation does not improve in the second half of the year. The biggest shock of the year came from industry leader Interamerican Life which unveiled first-half losses of 17.3 billion drachmas against profits of 11.4 billion drachmas in the same period in 2000. The principal cause of this negative result was the 5.1-billion-drachma loss from investment activities. In the corresponding period in 2000, the company had profits of 22.1 billion drachmas from this sector. Of more concern was the decline in life insurance premiums which fell by 6.5 percent to 47.4 billion drachmas from 50.7 billion drachmas. Consolidated life premiums declined by more than 50 percent to 36.2 billion drachmas from 72.8 billion drachmas. Non-life premiums on the other hand rose by 13 percent to 25.1 billion drachmas. This was not enough to offset the general trend, resulting in a 19.4-billion-drachma loss for the group. State-owned National Insurance saw its profits fall by 25.5 percent to 6.3 billion drachmas from 8.5 billion drachmas. Investment revenues dropped to 11.7 billion drachmas from 16.7 billion drachmas. Life premiums suffered from the stock market malaise and amounted to just 36.1 billion drachmas against 36.4 billion drachmas in the first half of 2000. While stock market losses were only restricted to Aspis Pronia and Interamerican, other insurers are believed to be just as affected. Reporting its interim figures, European Reliance said its results will hinge on its mathematical reserves and premium forecasts at the end of the year. It also valued its share portfolio at the price acquired rather than at its present market value. Similarly Metrolife, a subsidiary of Commercial Bank, appraised its share portfolio at the price acquired. Another subsidiary, Phoenix, reported an improved share portfolio after a valuation based on the current value. Metrolife’s interim profits fell to 199.6 million drachmas from 1.2 billion drachmas last year while Phoenix lifted profits to 1.7 billion drachmas from 1.4 billion drachmas. Both companies are due to merge. Agricultural Life, part of Agricultural Bank, boosted premiums by 28.4 percent. Profits in contrast plunged to 423 million drachmas from 1.6 billion drachmas following lower investment revenues. Agricultural Insurance reported a 10-percent rise in first-half profits to 2.7 billion drachmas from 2.4 billion drachmas as premiums jumped to 15.1 billion drachmas from 13.8 billion drachmas.