Premiums for fire insurance in Greece have increased by 12.6% in the first half of 2023, largely due to the introduction of compulsory insurance for businesses with a turnover exceeding €2 million. This new regulation, which came into effect on January 1, 2025, requires all eligible businesses to obtain fire insurance coverage, with a fine of €10,000 imposed on those who fail to comply.
The impending implementation of this measure has generated significant activity in the insurance market, as providers anticipate a further surge in demand as the deadline approaches. In addition to the financial penalty, businesses face exclusion from any state aid measures in the event of natural disasters after January 1, 2025.
Prime Minister Kyriakos Mitsotakis has announced plans to extend the mandatory insurance requirement to businesses with a turnover exceeding €500,000, effectively making fire insurance compulsory for the vast majority of companies operating in Greece. This move aims to ensure adequate protection for businesses against the risks of fire and other related perils.
The 12.6% increase in fire insurance premiums, while significant, is in line with the broader trend observed in the insurance industry. Similar hikes have been reported in other countries, such as Japan, where major non-life insurers plan to raise corporate fire insurance premiums by up to 15% starting in October 2023. The decision to raise premiums is largely driven by the need to address the deteriorating profitability in the fire insurance sector, which has been impacted by the increasing frequency and severity of natural disasters.
As the mandatory fire insurance coverage for businesses in Greece comes into effect, it is expected that the insurance market will continue to evolve to meet the growing demand for protection against fire-related risks. Businesses should carefully review their insurance needs and ensure compliance with the new regulations to avoid penalties and secure access to state aid in the event of unforeseen disasters.
