Them suggestions of to the government for the compulsory insurance of all properties from natural disasters is being prepared by the insurance market, placing particular emphasis on the granting of incentives and financing of property upgrade projects that are not considered insurable due to construction problems or due to geographical location.

Based on the government’s recent announcements, in the first phase (from 2024) the obligation will apply to medium and large companies with an annual turnover of more than 2 million euros.

Insurance should cover flood, earthquake and fire and cover building, machinery, equipment and stock.

From 1/1/2024 these companies will not be compensated by the state aid. It is estimated that this category includes around 16,000 companies – covering 87% of the total turnover -, most of which, however, were already insured as the compensations paid by the state budget have an upper limit that does not cover such size damages.

However, as Prime Minister Kyriakos Mitsotakis recently mentioned, it is time to start the public debate on the mandatory insurance of all properties against natural disasters, as it is the only way to restore damages that are impossible to cover both by the state and – in most cases cases – the family budget.

It is indicative that, according to his assessment Professional Chamber of Athens, the cost from the bad weather Daniel, in order to support those affected and to restore the extensive damage, amounts to, approximately, 5 to 8 billion euros (depending on the infrastructure works that need to be done).

The insurance market and the government therefore agree that the time has come for a definitive regulation on compulsory property insurance but, as the insurance market comments, home insurance is the regulation to focus on as for most businesses the compulsory insurance for the assets, the infrastructures and also for their workers, is an obligatory procedure.

In addition, the insurance market emphasizes the importance that must be given to the “education” of the citizens themselves in order for them to understand the importance of prevention for the protection of their property and that insurance is not “another tax”. Otherwise, even when the percentage of insured homes in the country increases, insurance awareness will remain low.

For this reason, the representatives of the insurance companies believe that there should be a meaningful dialogue and that there should be incentives to increase the number of those who will proceed to insure their property, especially from natural disasters, as today this percentage is particularly low.

According to the data, in Greece approximately 1 million houses out of 6.5 million are insured, i.e. the percentage amounts to 15% (most are in the cities, in the countryside the numbers are lower while overall most concern those who have bought a house with a mortgage loan). In businesses, the percentage amounts to 40%. In other words, 200,000 businesses out of 500,000 are insured, with at least one employee.

“An uninsured society recovers much more slowly from a catastrophic event than an insured society which will be quickly compensated by insurance companies. This is proven by the international experience” points out Errikos Moatsos, member of the Board of Directors and chairman of the Committee of Property, Reinsurance, Transport and Boats Association of Insurance Companies of Greece and adds that the recent fires and floods in the country highlighted in the most emphatic way the immediate need to close the protection gap in Greece. That is, to significantly increase the percentage of insured persons for natural disasters.

It is recalled that the subject of compulsory property insurance against natural disasters has been a concern of the Association of Insurance Companies of Greece for many years, but the intensifying effects of climate change do not allow for a postponement of decision-making for preventive actions.

The meetings of the following weeks are already on the agenda of the relevant ministries and the Association of Insurance Companies of Greece in order to formulate a comprehensive proposal aimed at strengthening the insurance awareness of the citizens.

Insurers estimate that the adoption of the 10% discount in ENFIA for insured homes was a first step but they believe that, surely, more moves are needed to effectively address the issue.

An additional factor that insurance companies point to is that they have both the know-how and the experience and the funds to take on this broader role that is required in the matter of natural disaster loss management.

“They have almost twice as much capital as required by law with a solvency ratio among the highest in Europe (184.6% according to the BoE Report). They operate under a very strict European regulatory framework (Solvency II) and are strictly supervised by the Bank of Greece in order to ensure that they can pay the compensations to their policyholders”, as Mr. Moatsos has stated.

The proposals processed by EAEE include in principle the granting of incentives for the financing of projects to upgrade homes that due to construction problems or due to geographical location are not considered to be insurable, the subsidy of the insurance premium for those homes that are not considered to be insurable (e.g. they were built before 1960, have illegal or have been built in high-risk areas) and tax incentives.