Special feature: Greece

Interview with Mr. Ilias Tsakiris, CEO and Chief Underwriter of American Hellenic Hull Insurance Company

March, 2018

Let’s begin by speaking about the shipping sector in Greece, historically the mainstay of the economy. Greek ship owners continue to dominate the high seas, owning over 19% of the world’s fleet, more than any other country. Despite the challenging global economic climate in trade and shipping, the sector has still contributed vastly to Greece’s economy. For example, for the years 2007-2016, maritime transport receipts were approximately €136 billion, 16% more than tourism. As an experienced player with a strong background in marine studies, how would you assess the evolution of the shipping in Greece and what key ingredients are needed to continue Greece’s legacy in shipping?

Mr. Ilias Tsakiris: The Greek’s are professional ship owners. They have been at sea all their lives and it was during the big boom of 2006 that they sold to the world their professionalism in this industry and evolved their shipping to the next level. We started doing business here in Greece back in 1994. The Greeks capitalized on the boom and managed to make a world statement that reinforced our position as professional ship owners specialized in all types of vessels. The majority of the Greek’s remain in Greece because they love their country and, in doing so, they also contribute to the economy. Shipping is the only area that still employs people and provides decent salaries, and our country is the only one in the world where shipping has not been subsidized by the state – zero subsidy. Furthermore, since there is no primary industry in Greece, exports are a key area where we can use our ships and as a result, our services are required all over the world.

The fact that the Greek shipping industry is outside of the Greek community helps. It remains private and independent, and as long as it remains like this it will always grow. The signs are that they wish they could grow more. The Greek’s are now sitting on the board of major insurance companies and organizations, and are evolving correctly as professional ship owners – they do not treat ships as commodities.

Turning now to American Hellenic Hull: under your leadership, the company has recorded phenomenal growth in its maiden voyage. In the first 12 months of operations, AHHC has insured over 2,200 vessels from more than 10 countries in 3 continents, exceeded premium income of $10 million, and covered over 35 million Gross Tonnes on 100% basis. What are the key, underlying success factors that have contributed to the company outperforming all expectations?

Mr. Ilias Tsakiris: The company is not a start-up. Hellenic Hull was established in Cyprus in 1994 with the objective of offering insurance terms to Greek and Cypriot shipowners on a neutral basis. In 2013, Cyprus had a massive banking crisis. We were cut off from our own reserves so we had a massive exodus of members. At the time did not accept Hellenic Hull as a good means of security. As a result, we sought alternatives and joined forces in 2015 with the American P&I Club, a part of the international group consisting of 13 P&I Club’s which cover third-party liabilities of owners. They wanted to expand their business to Europe which is what we do, so we joined forces and launched the American Hellenic Hull Insurance Company. We obtained our license in Cyprus on the 1st July 2016 and, from then on, we started driving business again.

Today, the company is successful as a result of a combination of factors. In addition to being a legacy business until now, it has a strong name behind it which is backed by the entrepreneurship of the American’s as well as the Greek heritage. Therefore, its success derives from these two factors combined, plus the fact that in this part of the world there are no real marine underwriters. There were some attempts, of course, but they failed. Our company is the only attempt that managed to survive from 1994 until now.

How did you do it if everyone else failed?

Mr. Ilias Tsakiris: Like every success in life, you commit yourself. If you put your personal aspirations underneath the greater good you usually succeed. It was a disgrace for Greece not to have a classification society. Every other nation – Germany, Italy, UK, have both, a classification society and underwriters, major services. This has two legs: one is finance and the other is insurance. So, in the case of damage the insurance protects the investment. Although our nation has the conditions and the perseverance, we still had to dissolve the myth that Greek’s cannot work together, for example, and that we are not good insurance risks. When Hellenic Hull started in 1994, it was offering all risks coverage to Greek’s, something no one was doing at the time. We believe in Greek ship owners, and the success of Hellenic Hull comes from being successful in 30/40% of the world and knowing you will be successful in the remaining market. We are very happy to see that at least 50% of our business or more comes from outside of Greece. The Greek’s are very hard workers, committed and passionate about what they do.

The success will grow even further because we have the advantage of living in the European Union, an excellent environment to work in due to it being very regulated. In fact, within the EU many activities started from the UK which further confuses me as to why it wants to leave. The regulated setting suggests that we are solvent as long as we remain in such a stringent environment. The American’s, on the other hand, are very eager to expand given that they are not traditional marine underwriters. The American P&I Club’s vision for Greece and Europe is big.

Where is the new growth going to be coming from, geographically speaking?

Mr. Ilias Tsakiris: The new growth will be coming from Europe and the US. The far East is a massive market, of course. We have offices in Shanghai and Hong Kong, however the insurance market there is already very strong, therefore to penetrate this particular market you have to prove a strong track record and show that you can serve the people well. Having said that, most of our growth comes from Europe, from either traditional shipowners or third-party managers.

Greece and the UK have tight historical ties and have, over the years, maintained a strong alliance. London has always been the financial hub for Greek ship owners but the UK’s significance has expanded to key areas such as tourism, trade and investment. We understand that you recently presented the company’s progress, underwriting activities and management initiative at the Trinity House in London to an audience of 500 industry players. What can you tell us about London’s ongoing significance for both the shipping and insurance sector and how are you preparing for the different potential outcomes of Brexit?

Mr. Ilias Tsakiris: The city of London voted No to Brexit by 80%, therefore this question does not worry me. Nobody knows exactly what Brexit means and how many billions of euros they will have to pay. Business will continue as usual, since no one will want to disturb a business model that actually works. The business centres will still continue to generate money, whether it be London or elsewhere. It is the working people that will suffer the consequences. The UK’s biggest asset is their legal system and is the only asset that keeps all businesses there. Even in America, the majority of the contracts are under English law. The legal system in the UK acts as a safety net, so I do not see any interruption of business due to Brexit as long as the politicians do not touch business.

It is a known fact that Greece has the highest rate of youth unemployment in Europe. It is also known that the youth is highly educated, driving many to leave Greece to tap opportunities in other countries. The so-called brain drain is a real issue. As an example of a successful Greek entrepreneur, what valuable lessons have you learnt throughout your journey that you could share with younger generations, especially those who are aspiring to entrepreneurship or to the insurance and shipping sectors?

Ms Vassiliki Christidi: Yes, we are currently designing outside the PSO routes. It would be a complete tour that can be experienced. Now, with the relaunching of our position in the market, we are developing a model that will offer a full range of the available routes for an island hopper. It will be a unique experience to connect all of Greece. We want to launch this island-hopping experience as a very user-friendly experience, a connected service. We hope to have it ready by the summer of 2018.

Is Sky Express targeting any international routes?

Mr. Ilias Tsakiris: We need more employers as this will create more businesses and job roles respectively. We need to train our young generation to start working and teach them that there is no easy way, unfortunately. We have to look at other entrepreneurs who have managed to build big business models to understand how and why they have succeeded. The government has to create the environment and the young generation have to identify the opportunities. My previous generation was closer to the war therefore their needs are basic. My mother taught me to have bread on the table; it is a major achievement and showed me that we have to work for the basic necessities. On the other hand, the younger generation, including my children, are very spoilt. We ourselves, are the government of our own country; we vote and choose our own lifestyles. The key is to work hard with a particular goal in mind. Shipping, for example, is a great industry in which to start a career as it has endless opportunities across various departments: commercial, legal, financial, etc.

Do you see the younger generations being interested in shipping?

Mr. Ilias Tsakiris: No, their mentality is that this line of work is not accepted socially so they prefer to work for a few hundred euros as opposed to going on-board a ship.

So there has to be a change in perception for them?

Mr. Ilias Tsakiris: There are sacrifices in life. If you want to buy a house, you have to save for it. Nowadays, it is easy to get a degree at university, everybody has one. However, what sacrifices are you ready to make to succeed? I see that the younger generation do not have the social skills that we used to have. They tend to hide behind keyboards. In this business, I want to trust you first before giving you my property. You need human interaction. Try to explain this to the employers, for example, that use Facebook to contact employees.

Here, at your company, you value running your business with a very strong and differentiating customer service which I think you can achieve by investing in your people, their skills and technology.

Mr. Ilias Tsakiris: The younger generation helps us to be innovative, so you have to be ready to accept these young people in your business. I started very young myself. The reality is that young people are innovative; they have stamina, dreams, visions but at the same time they have to work hard, otherwise it cannot happen.

Yes, the message is clear. I’d like to invite you now to make some concluding remarks, taking into account that through this interview you have the attention of Britain’s business and investor community in the UK. So, on behalf of American-Hellenic Hull Insurance Company, this is your opportunity to share a powerful message with the readers of The Times:

Mr. Ilias Tsakiris: Our company, American Hellenic Hull, is not offering a new product or something that does not exist. The difference is that we do not insure ships, we insure people; good managers, good crews and professionals. A ship is as good as its manager. We want to see the people running the ship. The Greek’s know the shipping industry very well which is why we have been outperforming all work ratios – we know exactly what we are doing. Whoever joins us becomes a very good ship owner, then manager, then operator. Most underwriters regard their ships as property only whereas, in our eyes, the ship is a live component. This is how we differentiate ourselves and what is a part of our success, coupled of course, with our Greek heritage and the American entrepreneurship.