GEORGIA: Insurance Association: transition to post-COVID period won't be easy

10 May 2022 —
Speaking about the results of the insurance market for the first quarter of 2022, the head of the Georgian Insurance Association, Devi KHECHINASHVILI, noted: "The main thing that can be said about the data for the first quarter is that we are holding on. Further, it will also be difficult, and transition to the post-COVID period will not be easy," Business Georgia wrote.

According to Devi KHECHINASHVILI, for the development of the insurance sector at this stage, introduction of compulsory vehicle insurance, which is the norm all over the world, is of decisive importance, however, there is not a single type of compulsory insurance in Georgia.

"Adoption of the law on benefits in relation to life insurance is also of great importance - the project is ready; it remains only to adopt it. In general, introduction of various types of compulsory insurance has long been an accepted practice all over the world, and in Georgia they have not been able to adopt a corresponding law for several years", the head of the Association believes.

He also noted that in 2021, most insurance companies either did not make a profit at all, or the profit was minimal. According to the Insurance Supervision Service, in 2021, the profit of the Georgian insurance sector decreased by 16%. Devi KHECHINASHVILI is sure that it is still difficult to make forecasts for 2022, but it is obvious that the year will be difficult.

"I think 2022 will not be easy. If the pandemic is over, then this is of course very good, but there are other factors hindering development of the insurance sector - war, inflation, and recession risks. As a result, the situation in the insurance market is so uncertain that it is impossible to make any forecasts. However, that's what business is for, to adapt to the existing reality and be effective in the conditions that exist", says the head of the Ardi company, Mikhail DZHAPARIDZE.

"Inflation always has an impact on our sector, especially when it's high. Insurance sector's losses will be large, and we will see this at the end of the year. In my opinion, 2022 will be a deplorable year for the insurance sector, and many companies will be heavily hit", said Archila MORCHILADZE, CEO of the Georgian Insurance Group.