An Overview of the Cypriot Insura nce Market

By our Correspondent in Cyprus, GIANNIS SEITANIDIS

With the premium production rising up to 4%, following a year during which production approached the milestone amount of 1 billion Euros, the Cypriot insurance field leaves a stronger mark on the Cypriot economy and makes it one of the most important pillars for the country's development. Life insurance companies manage funds amounting to 1.5 billion Euros.

The appearing slowdown of the economy in 2023 –forecasts indicate a growth rate of around 3% from a growth rate of almost 6% in 2022–combined with inflationary pressures, are expected to have an impact on insurance activity, especially in the field of General Insurances. On the contrary, in the sector of Life Insurances, the indications remain positive with households trying to build savings by taking advantage of the products of the companies in this field. There is already the momentum from last year…

The impressive increase in premium production by 15,7% of Life Insurance companies in 2022, drove the turnover of the Cypriot insurance industry above the milestone amount of 1 billion Euros.

According to the data compiled by the Association of Insurance Companies of Cyprus, the Life Sector (excluding productions in the field of Health and Accident) recorded a production of 520.074 million Euros in 2022, against 449.510 million Euros in 2021 and the sector of General Insurances achieved a production of 533.172 million Euros, against 512.408 million Euros in 2021 (including production in the field of Health and Accident by Life Insurance companies), that is an increase of 4,1%. In total, in 2022 we have a production of 1.045 billion Euros, from 961.918 Euros, an increase of 8,74%.

The insurance market follows the high growth rate of the Cypriot economy, which in 2022 ran at a rate of 5,6%, against the initial ominous forecasts, even for a recession.

The sector's contribution to the economy through compensations’ payment, is high. The Life industry paid 231.293 million Euros (+10,9%), while the General Insurance industry 235.35 million Euros (+7.2%), for a total of 466.643 million Euros.

The insurance sector in Cyprus presents a steady growth in recent years. This growth is due to the country's strong economic performance, favorable demographics (the population is growing thanks to the flow of foreign workers), as well as the increasing demand for insurance products.

The insurance industry of Cyprus consists of a large number of insurance companies, the member companies of the Association of Insurance Companies are 29, out of which, the main players are the subsidiaries of the two systemic banks (Bank of Cyprus and Hellenic

Bank), the two subsidiaries of the French Group CNP Assurances S.A., Ancoria, company of Swedish interests (it has also established a bank). Among the domestic players, Universal Life is the company that stands out.

As far as the Life Sector is concerned, Eurolife and CNP Cuyprialife still have the largest market shares, with marginal changes, compared to 2021. Both together, represent the 52,30% of the total production. Eurolife, a subsidiary of the Bank of Cyprus, stands in first place, with a premium production of 150.483.987 Euros in 2022, increased by 17% compared to 2021, with a share of 28,9%. It is followed by CNP Cyprialife, with a production of 121.637.241 Euros in 2022, increased by 9%, having the 23,4% of the total market share.

Universal Life remains in the third place, with a share of 12.6%.

Within the highly competitive field of General Insurances, the companies CNP Insurance and

Production of Insurance Companies in the field of General Insurances

The solvency coverage ratio as of December 31, 2022, was 248%, with equity capitals of €135 million.

Cyprus General Insurance is also a 100% subsidiary of the Bank of Cyprus. The main branches of the company's activity are: Automotive, Fire and Liability, which all together represent 90% of the total business portfolio. In 2022, the company's net technical result from operations in Cyprus amounted to 10,9 million Euros (2021: 12.6 million), lower than the previous year, due to higher compensation and expense costs.

The company's overall net claims ratio for Cyprus operations slightly increased from 34,8% in 2021 to 36,4% in 2022, mainly due to the motor vehicle sector. The solvency coverage ratio reached 168%.

CNP Cyprialife is a 100% subsidiary of CNP Cyprus Insurance Holdings. In 2022, it continued to improve its product portfolio and strengthen the network of its representatives. Profits from risktaking amounted to 35.601 million Euros, with the main profit contributors being the Health and Accident insurance sectors, as well as the Unit-linked savings sector. At the end of 2022, it had investments under management 556 million Euros, turnover 138 million Euros, total receivables paid 21 million Euros and a solvency ratio of 347%.

million Euros). The company's solvency ratio was 200% after the use of equity capitals, for covering the costs of the voluntary employee exit plan, which took place in November 2022.

In 2022, Universal continued to present strong operating profits from its two core businesses, Life and Health. The Group's pre-tax profits amounted to 10,6 million Euros, representing a significant increase in overall profitability compared to 2021, despite the decline in the value of certain investments. Total profit after tax in 2022 was 8,9 million Euros, compared to net profit of 0,3 million Euros in 2021. The improvement in profitability was mainly due to the improvement in the profitability of the Life Sector compared to 2021, which resulted mainly from a change in the valuation rate of actuarial liabilities.

General Insurance of Cyprus (also a subsidiary of the Bank of Cyprus) remain the leading players. They had the largest production of insurance premiums in 2022, with amounts amounting to 62.857.726 and 59.033.226 Euros, respectively. The market share of CNP Insurance reached 11,8%, thus taking the first place in the Cyprus insurance market in 2022, followed by Cyprus General Insurance, with a share of 11,1%. In this sector, the first two have a share of just over 20%, followed by a number of 24 companies that share the remaining production.

The Leading Players EuroLife is a 100% subsidiary of the Bank of Cyprus Group and offers individual unit-linked and single coverage products, as well as individual accident and health products. It also offers life and accident coverage, on a group basis. In 2022, it presented profits after taxes of 36,4 million Euros.

* It includes production of Health and Accident sector of life insurance companies

** Variation in production, compared to 2021

CNP Asfalistiki is a 100% subsidiary of CNP Cyprus Insurance Holdings. Its main activity is the conduct of insurance operations in the general insurance industry. At the end of 2022, it had 113 million Euros of investments under management, 136 million Euros of total assets, 62 million Euros of net assets, 65,3 million Euros of operating turnover, 22,1 million Euros of total receivables paid and a solvency ratio of 281%.

Hellenic Life (Hellenic Bank's subsidiary in the Life Insurance sector), in 2022 had a production of 39,7 million Euros (2021: 27.4 million) with profits after tax of 5,3 million Euros (2021: 2,9 million). The solvency ratio reached 358%. The company has remained focused on the operations it knows well and has proven to be profitable over the years.

In 2022, Ancoria had a production of 44,82 million Euros, compared to 24,81 million in 2021, out of which 14% came from individual life policies and 86% from Ancoria's occupational pension funds. In 2022, 93% of the total premiums concerned the Cypriot market and 7% the Swedish market. As of 31/12/22, 51% (40% in 2021) of the total funds of the insured concerned the Cypriot market and 49% the Swedish market. Given the level of insurance premiums coming from the Cypriot market, it is expected that the percentage of the total funds of the insured concerning the Cypriot market will increase and by 2024 it is expected to exceed the percentage concerning the Swedish market. The solvency ratio reached 242,4 %.

*Production of Health and Accident sector of life insurance companies is production,

Pankypriaki Insurance is the subsidiary of Hellenic Bank in the field of General Insurances. In 2022, it had a production of 38,166 million Euros, with its main activity markets being Fire Insurance (17,7 million Euros) and Vehicle Insurance (14,8

Trust, in 2022, had a production of 44,6 million Euros, compared to 41 million for 2021. All business sectors have increased compared to last year, apart from the medical sectors, which has decreased, due to the implementation of the General Health System during the previous years. Net claims amounted to 16,2 million Euros, compared to 15,9 million in 2021, while profit on withdrawal to 3,3 million Euros, compared to 2 million for 2021. All business sectors presented underwriting profits, apart for the sector of Motor insurance, which presented underwriting losses, which, however, are lower than last year, due to lower claims. The solvency ratio reached 170%.