The hour of insurers

The government will soon announce initiatives toward the growth of private insurance and boosting its complementary role to social insurance, Economy and Finance Minister Giorgos Alogoskoufis said yesterday. Speaking at the annual general assembly of the Association of Insurance Companies of Greece (EAEE), he described the private sector as the primary moving force of the economy and the government, therefore, intends to treat it on an equal basis with the public sector. He noted that the size of the industry in Greece is still relatively small, largely due to the existence of many disincentives that must be lifted. «Beyond tax incentives, a crucial factor in the growth of private insurance is the restoration of confidence and the consolidation of its value in the public mind,» Alogoskoufis said, adding that this will be promoted through the setting up of a new independent oversight authority for the industry «that has been staffed with the right people.» Deputy Development Minister Yiannis Papathanassiou attributed the slow growth of the industry to inadequate public oversight. «The state to date has never dared establish some order in the industry and apply the law on an equitable and firm basis… We will show zero tolerance to non-observance of the law,» Papathanassiou said. He said the ministry next week will issue solvency certificates to insurance firms, but financial audits will continue more exhaustively until the the law and public confidence in the industry are firmly restored. «The benefits of this policy will be multiple and will have a positive impact on the growth of demand for insurance products, which will also depend on firms’ pricing policy,» Papathanassiou said. He said the government hopes to see private insurance become the third pillar of the social insurance system, functioning in a complementary fashion to the main and auxiliary pension funds. According to EAEE data, the Greek private insurance industry grew 12.41 percent in terms of total premiums, led by the life insurance sector with 21.4, while vehicle insurance was up 4.73 percent and other general insurance 5.2 percent.

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