After remaining largely unscathed by the global financial and eurozone debt crisis, the Cypriot banking sector succumbed to pressure in 2012 triggered by huge losses from investments in Greek sovereign and corporate bonds. The depressed economic environment led to a sharp decline in employment levels, leading to erosion in consumer confidence and spending. The recessionary economic conditions eroded demand for life insurance products with the segment’s gross written premium falling by 7.1% in 2012. The life segment accounted for the largest share with 39.7% of the written premium of the overall insurance industry in 2012.
Friday, March 28, 2014
The Cypriot reinsurance segment registered a compound annual growth rate (CAGR) of 8.1% during the review period (2008–2012). The primary application of reinsurance in Cyprus is to manage exposure to weather-related events. Although not particularly vulnerable to natural disasters, Cyprus is highly exposed to floods, storms, extreme temperatures and earthquakes. The majority of reinsurance revenues are generated from the non-life segment, which ceded an average of 35.0% of its written premium during the review period, compared with 11.8% and 24.8% for the life and personal accident and health segments.