"Decisions that were taken during 2013 were important for the insurance industry in terms of the state social insurance and non-insurance related obligations. These changes were reflected in the 2014 results (and, it seems an obvious reduction in the income) that actually improved to a great extent (indicator) the profitability of insurance companies. Today, we can clearly conclude that the removal of financial programs, which aggravated the financial situation of companies, caused an increase in revenue and an improvement in the balance", explained Lasha NIKOLADZE, Head of the Insurance State Supervision Service of Georgia.
It must be noted that the negative trend recorded by the local insurance industry was driven by the lower premiums reported by two of the main business lines: Health insurance (-36.30%), Accidents (-9.11%), which accounted together for more than 57.28% of the entire insurance premium production: GEL 91.41 million or EUR 37.96 million. In the past years one of the main drivers of the local insurance market was health insurance (editor's note: the share of the health business in the market portfolio increased from 62% in 2011 to 74% in 2012, but in 2013 this segment went down by 18%, with a 72.46% market share). The main reason of this decline was due to the fact that starting April 1st, 2014 insurance companies were completely removed from all the government's projects, such as the universal healthcare program.
Starting 2015 Georgia will introduce compulsory insurance MTPL; this law functioned in Georgia until 2004. According to NIKOLADZE, the new line of mandatory insurance MTPL will occupy an important place in the portfolio of insurance companies in the field of non-life insurance. At the same time, this type of insurance helps to protect the population and to prepare the Georgian legislation on insurance to get closer the relevant EU legislation.
Access www.xprimm.com and download the 1H2014 Georgian insurance market statistics.
Market portfolio & market ranking (in EUR and GEL):
- Gross written premiums
- Paid claims
- Growth rates
- Market shares