Insurance Profile Georgia FY2020 is the latest editorial premiere of XPRIMM and is launched during the Conference. The Report includes statistical data on the Georgian insurance business for 2020, as well as on the last five years, interviews with representatives on the market and analysis articles. The report is produced with the support of the State Insurance Supervision Service of Georgia - LEPL. The report will be available online on www.xprimm.com.
The conference presented the discussion about the Georgian market's evolution in 2020 and David ONOPRISHVILI, Chairman, ISSSG declared:
- As for all the countries of the world, 2020 was the year of challenges for Georgia, which was also significantly affected by limitations and lockdowns, related with the pandemic.
- Even though together with the impact of pandemic, there were other regional challenges, which had a significant impact on the projections for the next 5 years, Georgia has still maintained the positive outlook on the sustainable development of economy.
- The efforts of Georgia to be a valuable part of global economy, create and maintain one of the most attractive environments for foreign investments remains unchanged over the last several years. In accordance with World Bank yearly report, Georgia is holding a 7th position in Ease of Doing Business ranking. Despite all the complications, there is even an improvement of the score from 83.3 in 2019 to 83.7 in 2020.
Gerhard LAHNER, Member of the Executive Board, COO, VIENNA Insurance Group presented the expectations for the Georgian market and declared:
- Insurance business is very close to the client and we trust that people know best what are the needs of their clients. We follow relatively open approaching sales and very strictly approach when it comes to investments and reinsurance policies.
- We have research centers in all of the countries where we are active and spending about EUR 50 million on the yearly budget for the digitalization but in a decentralized way.
- In Georgia, we feel the support of the supervisory authorities as we sustain anything that goes into the direction of a unifying with the European standards of doing insurance business. VIG support the prioritization of the MTPL introduction in Georgia and hope that will attract new FDIs, but also the Life insurance will play a very important role in creating value and well forth of the society of Georgia.
- Also, VIG has a very stable strategy for Georgia with a target to long term market leadership. The growth strategy for the market is supported by health insurance profitability, a long term and sustainable development and VIG offers his help in this regard by invest in human and financial capital
- Regarding the implementation of the MTPL on the Georgian market there is a reasonable approach with a mindset to support the society in getting a right price for the insurance. It is important to respectfully go to a kind of introduction so that the long term trance can be followed and found rightfully for the Georgian market and not copy the international developments, but focus on what is the right price for the Georgian market.
Ekaterina TOLSTOVA, Senior Financial Analyst, S&P Global discussed about the S&P view on the insurance markets' journey in the region throughout 2020:
- We see that the impact of COVID-19 on global insurance markets has been largely felt through asset risks, notably capital markets volatility, and weaker premium growth prospects. We expect most COVID-19-related losses (business interruption, event cancellation, etc.) to be picked up by reinsurers, so primary insurers' technical performance is unlikely to deteriorate materially.
- Strict lockdown measures helped maintain satisfactory performance, as reduced motor and medical claims had a positive impact on loss ratios.
- Developed markets, particularly life ones, are likely to shrink in real terms as a result of the economic slowdown. Developing markets have higher proportion of riskier assets that could impact the bottom-line results more than in developed markets.
- The capital of insurance sectors in Georgia and selected countries is gradually growing. One of the supporting factors was that during the pandemic, the regulators asked the insurance companies to suspend dividend payments.
- Regarding the growth of the insurance, it remains volatile in the developing economies. One of the most important factors for the further growth of the market is ongoing regulatory initiatives.
- Profitability of the insurance sector remains one of the highest in the financial sector;
- Life insurance can gain momentum in the medium term and this is an important factor to be considered, especially as life is one of the main business lines for developed economies and here is a potential growth for the development market.
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