It seems that 2010 will be an interesting year for the private insurance companies which cannot yet get rid of the Aspis Pronoia problem. The company where 1 million Greeks were insured was liquidated in October after its executive director Pavlos Psomiadis presented in court false bank guarantee for 550 million euro. The company was closed, hundreds of its employees were left on the street and Psomiadis himself was released after paying a warranty of 100 000 euro and is banned from leaving the country. The faith of the life insurances of over 1 million clients of Aspis Pronoia is not yet clear and the people might be about to lose their money.
The Greek government has prepared a bill which is intended to make the private insurance companies to establish something like a mutual insurance fund and the money in it to cover the losses of Aspis Pronoia. The association of the private insurance companies generally agrees with the idea about the mutual insurance fund, however it does not agree for the fund to act with a reverse power and to cover the losses of the bankrupted due to criminal bad management company of Pavlos Psomiadis.
The argument of the private insurers is that it seems that 2010 will be a difficult year for the industry and the companies will simply not be able to afford to undertake additional financial burden. During this year they will have to undertake additional measures for the financial rehabilitation of their business which measures when combined with the economic crisis make their situation rather difficult. According to the experts it would be particularly difficult the condition of the small insurers, many of which might not be able to manage and keep their positions on the market. Despite of the unfavorable economic environment, however, this week two of the biggest private insurance companies Alianz and Eurolife accounted for increased sales in 2009.
During the week came the end of the term which the Bank of Greece had given for a strategic investor to another insurance company which is in trouble - Commercial Value. The supervisory body of the private insurance companies banned the company from signing new insurance contracts until its future is clear and its executive director Stefanos Avguleas resigned.
Having in mind this new intrigue around Commercial Value two companies submitted their documents in order to acquire part of its shares and along with them the shares of Aspis Bank. 35 percent of the shares of Aspis Bank belong to Commercial Value. These two companies are the Russian Borodino, which already received the approval of the Bank of Greece and the English fund AnaCap Financial Partners. Apart from them the Greek Post Bank has also declared their intention to buy 32,9 percent of the shares of Aspis Bank. Commercial Value expects another 13 million euro from the Swiss fund Hestiun, however its return depends on the verdict of the court in Zurich.
The fate of Commercial Value is particularly critical for the entire insurance industry. If the company doesn’t manage to find a strategic investor, the would in the private insurance cause by the bankruptcy of Aspis Pronoia will increase even more and it will reflect on the trust of the clients.