MORE GREEKS TO STEP ON BULGARIAN INSURANCE MARKET
A new Greek-Bulgarian insurance company will start operations in Bulgaria in the coming six months. The National Bank of Greece (NBG), through its subsidiary Ethniki Insurance Company, is planning to create a joint-venture with United Bulgarian Bank (UBB), Theodoros Karatzas, NBG Chairman of the Management Board, said during the NBG Group presentation on June 4.The new company will be indirectly controlled by NBG, because the Greek banking group is the majority shareholder in UBB (holding a 89.9% stake) and in Ethniki (a 75% stake). The shares of the new company will be equally distributed between UBB and Ethniki.The joint-venture will develop both general and life insurance, Stiliyan Vutev, UBB CEO and member of the Board of Directors, said. The legal implementation of this idea is still pending. The initiative will help UBB combine bank and insurance services. The bank will use its already established network of branch offices. We'll be able to make our reputation, because life insurance still offers sufficient potential, Stiliyan Vutev summarized.Apart from the new insurers from NBG, there are two Greek groups presented on the Bulgarian market - Interamerican and AIG.Ethniki is Greece's largest company which controls a 20% market share. It was established in 1891 and went out on the Athens stock exchange in 1946. The company has 67 branches in Greece, one in Cyprus, and a subsidiary in Romania called Garanta. 37% of the total 1999 premium proceeds came from life insurance, 21% - from car insurance, and 7% - from general insurance. The company offers reinsurance services, too.The general insurance business brought BGN466.760MN in revenues to Bulgarian companies in 2002. Gross premium income reported by life insurers amounted to BGN47.359MN. However, in 2003 this amount will be much lower as tax relieves for Life insurance policies will be removed. Currently, only 10% of the taxable income will be allowed for investment in insurance without income tax being required. Obviously, the joint-venture between UBB and Ethniki is going to redistribute the market shares of the competitors.