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Minos Moisis is president of the National Insurance Company – the largest private insurance company in Greece with an annual turnover of € 1 billion. For comparison - the second largest Greek insurance company Interamerican has annual turnover of € 500 million. He was appointed for president of the Association of Insurance Companies in Greece several months ago. He has more than 25 years of experience in the Greek insurance market. In a conversation with Maria S. Topalova Minos Moisis analyzes the Greek security system, comparing insurance markets in Greece and Bulgaria and said that no other insurance company is expected to be closed.    
 
- The social security system in Greece is completely wrong and caused much damage, but it also gives private insurance companies the chance to grow at a faster pace. What is the state of the Greek insurance market at the moment?
 
- First, the social security system is not completely wrong. These systems are facing problems not only in Greece but in many other countries too. People are living longer and therefore spend more money from the social security funds. The high unemployment rates registered in societies as a whole in Europe has also its impact. But generally, these systems were created with the aim to protect citizens and so it should be. It is just conditions have changed much, demographics have changed a lot and therefore these systems should be adjusted. In fact, the money a man gets after retirement should be enough to provide a good standard of living. The social security funds are insufficient to provide it, as happens in many other European countries. So, private insurance comes to supplement these funds, just like in other places. This provides private security companies in Greece and in other countries prospects for development and an opportunity to enter new areas, but a legal framework is necessary. In many countries the private insurance is included in the common system of allocation of funds through major tax incentives. This means that the state is aware it will have to provide some incentive for people to save for their pensions and it is through strong tax incentives on the one hand. On the other hand, the requirements for the products to be included in this system and the reliability of the companies that will deal with it are very strict. This is, how can I say, not definitively regulated in Greece yet. This is a great perspective and challenge for private insurance, but we have to wait to see what will happen. Then we will finally outline our strategy in this area.

- There are many insurance companies of stable development, traditions and history in Greece like the National Insurance Company. Obviously, the people working there are good professionals. At the same time, we don’t see insurance companies to participate in the national dialogue on social security. Aren’t you interested in the future of social security?

- No, of course, as I said before, we are interested very much. But I repeat that the private insurance has no determining role with regard to social security. The state, because the state is responsible for social security, have to decide first what it wants to do. We have no voice on the social security issue.  

- Are there any opportunities for cooperation between the public and private sector in your opinion?

- Yes, there are many opportunities for such cooperation and there are many already operating in the field of insurance companies. For example, private insurance today covers a significant percentage of people in matters of health with health care funds. This cooperation exists. It is not 100% established, but we, as private insurance company, supplement what the state does in the fields of health care, pensions and other areas. Therefore, there is cooperation in this sense already and I believe it will increase in the coming years. Because I think the state will understand that the private insurance adds to the funds of the people who are able to pay for it and in this way the state itself will have greater opportunity to take care of the people who can not pay for private insurance. Thereby increasing the opportunities for social care and protection of citizens.

- There is some degree of uncertainty on the Greek insurance market. Six insurance companies closed recently, others are preparing to leave Greece. And because the crisis is serious, it would not be a surprise if other companie close. What happens to the personal records of insured persons in these cases?

- First, let me tell you that as chairman of the Association of Insurance Companies in Greece I do not have any information that some companies are preparing to leave the Greek market. This is a rumor as there is no official information. Now that some companies were closed resulted from the fact that there was strict control on private insurance in recent years. Unfortunately, it lacked in the past years to the extent that it is exerted in recent years. And it put on the surface problems that existed before. Unfortunately, for the first time in Greece it happens to be closed a company that had a significant life insurance portfolio for its clients. And this is a serious problem. When a company is closed and has car insurances the damages of its clients are covered by the Auxiliary Insurance Fund. Such a fund has been operating smoothly in Greece for many years and in all European countries too. Now, on the issue of life insurance. A new law is being developed now which will be presented in the Parliament the next week. It provides the establishment of a guarantee fund, which will be funded with payments from insurance companies and clients. It will undertake to cover clients to a certain limit if another life insurance company happens to be closed, something I do not think very likely. There is a problem with what have already occurred and it is very difficult to solve it because a lot of money is involved.

- It is known that Greek banks will have to undergo a stress test in September. Something similar is expected to happen with insurance companies, the so-called Solvency II. Could you tell us what it means and what will happen to companies that fail this test?

- You see, this is a big change in Europe as a whole and does not affect only Greece. The information we receive from all European countries is that the preparation for Solvency II is a very difficult and cumbersome process for the companies. In practice, Solvency II is a new mechanism that allows us to measure the risks we have taken and which are insurance, operational, investment, ie any risks, using different tools. And the size, quality and extent of these risks will determine the necessary capital. The assessment is, now we can speak only of assessments, the assessment is that this system, which is the same in Europe, will necessarily lead to significant increases in capital, ie more capital will be required, which can often be a serious amount. We can not say more because we do not know the figures. All companies are preparing for the steps to follow. We will have a clearer picture after the end of summer, when these stress tests provided for Solvency II will have been started. Nor it is decided whether the requirements of Solvency II will be those we know today or they will differentiate and become more flexible to a certain extent. There is a serious discussion in Europe currently between supervisors and the Union of Insurance Companies. All this will be considered, and ultimately this system will lead to something concrete. Companies that fail to adapt, because of inability to find new capital or to adjust to other things, not only to capital but also to the way of operation, the internal company organization, etc., will need to gradually prepare to find some kind of cooperation, consolidation, merger, according to me. I believe this will make and push the market to change and focus on a smaller number of companies that will be able to respond to the capital requirements of Solvency II.

- The National Insurance Company is present on the Bulgarian market. Can you compare   the development of the both markets in Bulgaria and Greece?

- The National Insurance Company has been on the Bulgarian market for several years now in a joint venture with the company ING. We are very pleased with this collaboration and with our presence on the Bulgarian market. We have already acquired significant market share. The activities we develop in Bulgaria are carried out entirely by UBB Bank. We follow the bankassurance model through UBB Bank. Both markets have different features. The Bulgarian market as a fresh market, not as mature as the Greek one, offers greater opportunities for development and that’s why we are there. We have an exclusive basis for development. The bank, which is implementing the bankassurance scheme, is the largest bank in Bulgaria. Therefore we have a very good set up to develop very dynamically on the Bulgarian market. We must realize the model we have. Things are different in Greece, the market is more mature. There are other systems and ways to collect insurances, there are various channels for selling insurances, the model is quite different. I am convinced that the development model we have chosen is very suitable for markets such as the Bulgarian, in which we strongly believe.

- What is bankassurance, can you tell us how it operates?

- Bankassurance is actually a way to distribute insurance products, ie to sell insurance products. These products are usually created by insurance companies as in our case in Bulgaria. These products tie, attach to the products sold by the bank. That is, for example, a product that covers life insurance or temporary disability of a client, who has taken a housing loan from the bank. This is very important for the client and the bank, and of course, the insurance company. For the customer, because in case of death, the insurance company will compensate the bank for the remainder of the loan. Therefore no tender actions should be taken for the house and the family will not be obliged to pay the remainder of the loan. Thus the bank also protects its portfolio of the risk borne by that customer. Of course, it is rewarded provisions for this activity. And the insurance company creates the product and reports the outcome of this activity. There are many similar products in housing, business, and consumer loans and credit cards, ie in the full range of banking products. And of course, there is another category of products that are more savings. Those are when the customer deposits some money and saves them in something like a money-box. The banks in many countries and in Bulgaria sell similar products. And because they know the customer well for he uses a lot of their products, they can easily offer those products aiming to collect a certain amount, which will be used for pension or lump-sum payment. This is the model and there are many cases of its successful implementation in many countries – and in Greece and Bulgaria, and elsewhere. And thus we have chosen to expand in Bulgaria, namely because we have a very large bank for an ally.

- What is the survival strategy of the National Insurance Company in this economic crisis, which experts say will continue for at least 2-3 years?

- Look, our strategy is not just to survive, we want to develop. This crisis has certainly made us see things differently, from another perspective. What we must do and we’re doing it, because we are a large company, is to understand that the client can no longer buy our products as easy as buying them a few years ago. This requires us to adapt our products, to make them cheaper, although naturally a less expensive product can not provide full coverage, which would give a more expensive product. So, we are trying to impress on our clients that in times of low purchasing power that will probably fall further, they should choose products that might not cover all risks, but cover serious risks. Thus, the customer is actually protected from serious risks, therefore he is secured, but of course can not have the full protection, which is much more expensive. This applies to all areas - life insurance and health insurance, and car insurance, and housing, ie the whole range of products. And to do that we need to think how our company can start operating so that ultimately the value of the product is affordable for the consumer to pay it. Therefore, all companies, and of course the National Insurance Company, monitor very closely the operational costs, where money is spent, so we can reduce costs where we are able to and where the spent money have no great value in order to make our activity and our products less expensive. At the same time, we search all opportunities for development created by the crisis, and they are many. I personally think that this crisis will greatly enhance the property insurance, ie in times of crisis, when one has some valuable assets, it is more important to protect them now than before the crisis when, in the case of damage he himself could, with his own funds to repair the damage and to cover the risks of fire or anything else. Slowly, the customer understands that a significant damage suffered by his property as a house, cottage etc., will place him in a situation which he can not cope with. Therefore, he will tend to insure more against this risk. There are many opportunities for which we prepare to create new products. We reduce the operational costs and collaborate with the National Bank of Greece to reach the customer cheaper and more reasonable.