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The loss of insurance companies in Greece was 900 million euro last year compared with 2010, according to the Association of Insurance Companies. This is the worst result for the sector since 1990, experts stress. They attribute the negative development to the difficult economic situation in the country and give the reason for the loss as the debt restructuring. The haircut of the face value of Greek government bonds held by private investors (PSI) has seriously affected insurance companies.

At the end of 2011, the deputy head of the National Insurance Company Leonidas Theoklitos, who is also the chairman of the management board and Deputy CEO of National Bank of Greece, said that insurance companies in the country held in their financial portfolios a total of 4.5 billion euro in state bonds. After the debt haircut, the companies lost 2.3 billion euro of their capital.

According to the latest data provided by the Association of Insurance Companies in Greece, the total assets of the sector were 14.7 billion euro in 2011. There was a decrease of 6.8% compared to 2010 when their value was estimated at 15.7 billion euro. The decrease in investments for the same period reached -7.5%. In 2011, they totalled 10.4 billion euro against 11.3 billion euro in the previous year. One billion euro of investment melted due to the PSI process. The biggest loss was in the capital strength of insurance companies, the Association said. It dropped by 34.1%.
 
Insurance companies resorted to a significant increase in share capital in 2011 to offset the losses from the recession, the market shrinkage and the haircut of the face value of government bonds. Equity increased by 22.9% in 2010 and rose from 1.3 billion to 1.6 billion euro last year. Its value is expected to double in 2012, due to the market consolidation policies.
 
The operating insurance companies in Greece are 69 in number. The majority of them are active in the sector of damages and one third of them are specializing primarily in life insurance. There was an increase in the profit in life insurance, which brought the companies a total of 780 million euro in 2010. In 2011, this figure rose to 850 million euro. The revenue from car insurance increased by 58.6% compared with the two previous periods. Two years ago, these profits were 130 million euro. In 2011, the profit from car insurance rose to 200 million euro. However, companies continue to struggle with the difficult economic conditions and the high capitalization requirements of the supervisory authority.