GEORGIA: insurers' capital increased significantly in 2021, while profits decreased

20 April 2022 — Marina MAGNAVAL
In 2021, GWP of Georgian insurers increased by 16% to GEL 772 million (~EUR 220 million), but the profit practically did not grow, as the Head of the Insurance Supervision Service David ONOPRISHLVILI noted, Business Georgia wrote.

The Head of the Insurance Supervision Service believes that this is due to that in parallel with GWP growth, expenses of insurance companies are also growing. "In 2020, at the initial stage of the pandemic, people almost did not go to doctors, thus, the costs were low, however, at the end of 2020 and in 2021, attendance at clinics increased, and costs of insurance companies increased as well.... As for net profit, it amounted to GEL 40 million, even though in the 2020 pandemic year, this figure was higher - GEL 47 million. Just like the growth in 2020, the decline in 2021 was due to fluctuations in the GEL (lari) exchange rate since the capital of insurance companies is fixed in USD. In 2021, a slight appreciation of the lari at the end of the year contributed to a decrease in net profit. Apart from this, in 2021 the insurance sector remained stable and managed to retain personnel", David ONOPRISHLVILI explained. The capital of insurers has grown significantly from GEL 279 million in 2020 to GEL 342 million in 2021.

David ONOPRISHLVILI noted that the main LoB is health insurance, which accounts for almost half of all GWP (GEL 305 million), motor insurance ranks second (GEL 143 million), and property insurance ranks third (GEL 118.5 million). "Today, Georgia has a state health program that provides basic insurance for free, so private insurance is not growing and has been at about the same level in recent years covering about 17% of the total population of the country. As for motor insurance, it is compulsory all over the world, and only in Georgia it is voluntary", he explained.

1 EUR = 3.5040 GEL (December 31st, 2021)

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