Insurance sector accounts for 4% of GDP

The insurance sector has a turnover of €1.4 billion, accounting for about 4 per cent of GDP, it was reported on Monday.

Business new outlet Stockwatch said the data was cited last week at the House finance committee while it was reviewing draft legislation on the creation of a national life insurance guarantee fund.

MPs heard that in Cyprus there operate 32 insurance companies with some 2,500 insurance brokers – 600 of which are corporate entities.

Christiana Erotokritou, chair of the House finance committee, noted that the insurance industry has great potential and could be twice as big as it currently is – now at 4 per cent of GDP.

The government bill, expected to go to the plenum for a vote before recess for the Easter holidays, aims to create a life insurance guarantee fund to compensate counterparties and insurance beneficiaries in the event an insurance provider goes into liquidation and where its life insurance portfolio cannot be transferred to another company.

Members of the fund will be all insurance businesses headquartered in the Republic of Cyprus and holding an operating permit in the life insurance business, as well as branches of insurance companies of other countries holding an operating permit and exercising the right of free establishment in Cyprus, provided they are not covered by corresponding guarantee funds in their country of establishment.