Talanx : “The crisis also presents an opportunity”

24 February 2017

Notis Vagiakakos, Managing Director of the Greek branch office of HDI Global SE, and his colleague Elina Papaspyropoulou talk about their work in the middle of an economic crisis

How does it feel to be working for a German company while tens of thousands of Greeks are out on the streets protesting against the European Union and Germany?
Notis Vagiakakos: Our branch office is located right in the centre of Athens and in this position we naturally experience all the protests at close quarters. Some of the Greek media and many people in social networks believe that Greece's creditors, and Germany in particular as the most powerful country in the European Union, are responsible for causing the appalling consequences resulting from the austerity policy, the spending cuts and the tax increases. But we are in a position to make a sober and objective assessment of the situation. And that is also the case for our customers. That's why being a German company doesn't in itself cause us to experience any disadvantages. At most, we are sometimes the object of a few jokes, but we do counter-jokes as well.

Elina Papaspyropoulou: In fact, it is actually an advantage that we are able to offer a high level of stability as a German insurer with a strong financial platform. We are a reliable partner, especially when it comes to claims management, and this attribute is precisely what our customers value particularly during these difficult times.

In 2015, everybody was talking about Grexit, or Greece leaving the eurozone. What was going through your mind at the time?
N. Vagiakakos: As far as we were concerned, the situation was crystal clear, and that remains the case today: Greece needs to remain in the eurozone. In order to ensure that the Eurozone continues to thrive for a long time into the future, we as Europeans need to come closer together in political terms and create something like a 'United States of Europe'. Europe is much more than simply the euro and we should not forget about the vision of European integration. The EU has brought us a period of peace in Europe which I believe to be without parallel in our history.

How are Greeks getting on today?
Elina Papaspyropoulou: Since the beginning of the crisis in 2009, gross domestic product has fallen by around 25 percent. This has created severe social fault lines which are exerting a very serious effect on the country. A large number of people are unemployed, almost every second young Greek person is unable to find a job. The state has reduced pensions and this also constitutes a heavy burden because a lot of pensioners are providing financial support for their unemployed relatives.

N. Vagiakakos: In addition, the country is also suffering from an exodus of skilled workers and academics. Almost half a million young, highly qualified Greeks have already left the country. This is eroding the long-term potential of Greece as a country.

E. Papaspyropoulou: And we shouldn't forget the controls on the movement of capital, which make life difficult for people and companies.

How did you deal with this situation? After all, financial transactions are what business is all about.
E. Papaspyropoulou: When the controls were introduced, we had to act quickly. In close cooperation with the Home Office in Hannover, we made provisions to safeguard the interests of our customers. This primarily entailed making sure that payments for claims, which are a significant factor for our customers, could continue to be made quickly.

It is quite remarkable that you remain successful in spite of the ongoing crisis besetting Greece.
N. Vagiakakos: That's quite true. Over the seven years of recession, we have managed to maintain our position and even succeeded in strengthening it further. This is evident not only in the result but also in premium income. I am very proud that we have been able to uncouple our business from the general economic development.

How have you been able to achieve this?
N. Vagiakakos: One of the reasons is that we are part of a group with a very sound background. This dependability gives us a certain advantage over our competitors who sometimes appear to be rather more volatile. Naturally, we also have a highly qualified and well-trained team which is extremely well networked. And don't forget that the crisis also presents an opportunity. In this phase, stable companies like HDI Global are able to expand their market share. We do this without putting our position at risk and losing our good customers.

How important was the step of being able to write industrial risks beyond the Greek market?
E. Papaspyropoulou: Since the market in Greece is shrinking, we obviously have to think about our long-term future. This is the reason we are expanding in selected markets within the region. For example, we are writing business in Malta, Israel, Cyprus, Turkey and in the Balkan countries. At the close of 2015, our business outside Greece represented around 20 percent of our entire portfolio.

N. Vagiakakos: Initially, we followed our Greek customers and brokers into these markets. Gradually, this move was transformed into a strategic expansion. For example in Israel, we have already been able to acquire important customers in the area of property insurance. Our perception is that there is great potential for Engineering Insurance in Israel, while in Cyprus our main thrust is directed towards addressing small and mid-sized companies because the market there has recovered to a large extent.

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