Cyprus Insurance Sector Shows Robust Growth
In a recent report, it was highlighted that the insurance sector in Cyprus is demonstrating significant economic growth, with a turnover of €1.4 billion, which represents approximately 4% of the country’s Gross Domestic Product (GDP). This robust performance was brought to light during discussions at the House finance committee, which convened to deliberate on new draft legislation focused on bolstering the national life insurance framework.
The landscape of the insurance industry in Cyprus is quite dynamic, with 32 insurance companies and a network of around 2,500 insurance brokers, including 600 corporate entities. This sector not only contributes to the country’s economic stability but also provides a multitude of services to individuals and businesses alike.
Christiana Erotokritou, who presides over the House finance committee, expressed optimism about the industry’s future. She emphasized that the insurance sector holds immense potential and could potentially double its current size from 4% of GDP. This sentiment underscores the confidence in the sector’s capacity for further expansion and its role in the broader financial ecosystem of Cyprus.
The proposed government bill, which is slated for a vote before the parliamentary recess for Easter holidays, aims to establish a life insurance guarantee fund. This fund is designed to offer protection to policyholders and beneficiaries in the unfortunate event that an insurance provider faces liquidation and its life insurance portfolio cannot be transferred to another entity.
Under the new legislation, membership in this life insurance guarantee fund will be mandatory for all insurance companies based in the Republic of Cyprus that are licensed to operate in the life insurance sector. Additionally, branches of foreign insurance companies that are licensed and operating under the right of free establishment in Cyprus will also be required to join, provided they are not already covered by equivalent guarantee funds in their home countries.
This legislative move is seen as a proactive step towards enhancing consumer protection and maintaining the stability of the insurance market in Cyprus, thereby fostering an environment conducive to growth and investor confidence.
