The event has been divided in 3 panels and focused on the challenges during the Covid-19 and how much the Georgian insurance market has been affected by the pandemic. It brought together local and foreign insurance and reinsurance companies, representatives of the public authorities, supervisory bodies, financial institutions and professional insurers brokers' associations in order to share their official opinions on the latest trends in the insurance field and the potential impact it could have on the local market.
On the first panel, discussing about the insurance industry and its performance during the pandemic in 2020, the main statements of the guests were:
Prof. Karel van HULLE, KU Leuven and Goethe University Frankfurt:
- The pandemic, which is right now across the globe, is a good example for an unexpected risk
- In insurance is all about customers and many of them discovered a new protection gap; they found out that they are not protected in terms of business interruption, travel and other situations
- The insurance industry showed sometimes its irrelevance and lack of empathy by refusion coverage in cases where may be the customers should have received coverage; only in a few cases insurers were prepared to compensate policyholders in areas such as motor insurance
- The direct insurance losses from Covid-19 were fairly limited, if we look at the solvency ratios in the European economic area, we see that it still stands very strong at 225%, as EIOPA shows.
Francisco CARRASCO BAHAMONDE, Deputy Director General of Regulation and International Relations, Directorate General of Insurance and Pension Funds:
- Insurance undertakings continued to operate normal the day after the constrains were declared, they continued to cover risks and provide services to the customers. In this sense, there have been no huge problem at least in Spain and general in the EU
- In general, the financial performance of the insurance industry has a strong correlation with the evolution of the economic situation and there is still too much uncertainty in this respect
- Situation of restriction of economic growth, such as the one derivate from the pandemic will probably affect the sales of contracts; if, in addition, there are constrains measures, the impact will become more severe because the sales of many policies is largely based on face to face relationship between the distributor and the client.
- The health insurance, has not been as affected as initially expected in Spain
- As regulator, we are now even more aware of new risks that may affect the industry, such as IT risk. Greater risk awareness is also an opportunity for everyone, including insurance and financial education.
David ONOPRISHVILI, Chairman, Insurance State Supervision Service of Georgia:
- There is a 6.5% growth in gross written premium for the first 9 months of 2020 and some more increase in September by 8.7% in comparison with the same periods of 2019 whereas last year market growth rate was 15.5%
- There is a 11% increase in Net incurred claims this year which indicates that the industry is active in most lines of the business
- There is a certain decrease in numbers of Health insurance claims, which is mainly related to Covid-19 spread control measures and inability of insured persons to apply for non-urgent and planned services in healthcare insurance.
- Medical insurance still holds the largest share on the market
- There is still great potential in the market, especially with regards to the implementation of compulsory MTPL, professional indemnity and long term /investment life insurance products
Dimitri KUMSISHVILI, President of the Board, Green Insurance Georgia:
- insurance sector should become a major player, an important factor in our economy which will create as much public as it can in our country
- insurance companies are one of the largest institutions of investors in the international market, but not in Georgia. In order for Georgia insurance companies to become institutional investors is important to implement a compulsory insurance under the European Union association agreement
- according to 1Q2020 data, as many as 616.000 health policies are valid with corporate customers accounting for 55.3%, retail customers for 38.8% and the state for 5.9%.
- as regards the land vehicle insurance market, only 7% of registered vehicles in Georgia are insured; there are 1.4 million vehicles registered in Georgia and the absolute majority of them (87.2%) is more than 10 years old.
Miriam BLAZQUEZ, Chief Risks Officer, Sanitas (BUPA Group):
- In Spain, more than 10 million people (2 million civil servants) held in addition a private insurance policy
- Due to the pandemic, there were video consultation available for all he policyholders with more than 4000 consultations per day
- The pandemic was excluded in the policy, but from the very first moment Sanitas took the decision to cover all the Covid-19 medical treatments
- Through the main lessons learnt from Covid -19 we can mention: build the New Normal on emerging trends and opportunities; customer decisions in the short run will be highly influenced by emotions; take into account of the approach: "The sooner the better"
- This pandemic has demonstrated that health is a priority for the society and is good to have a cooperation between the public and the private system;
Aleksandre KOBAKHIDZE, Deputy Medical Director, EUROINS, Georgia:
- In Georgia, the insurance market was not so much affected by the pandemic compared to other sectors, such as hospitality and hotel services, but it affected relevant business lines in insurance, like travel insurance
- During the lockdown period, medical claims have been reduced and after reopening the economy, Georgia record cumulative effect in June and July
- The most important point within the pandemic is the negative impact on local currency, as there was a significant devaluation of local currency which caused the price increase of the medical services and especially for medications.
- The expenditures of the medications are one of the critical challenges not only for insurance company, but for overall global healthier systems.
Cornelia PARASCHIV (SCARLATESCU), Managing Partner, Medical Check In:
- It was a problem of prioritization because we had issues regarding how is going to be tested, treated or ventilated and in the future maybe who is getting the vaccine and all these came because lack of resources in our systems
- another problem is a problem of competition because of the vaccine and the nationalization as each country wants the medical resources only for themselves
- the health insurance companies changed the way they provide medical consultancy: via online video call, or telehealth services; they should reorient, reengineer their policy design because the classical model to offer services is no longer available
Michael JAPARIDZE, CEO, ARDI Insurance:
- the log term effects are not easy to see now; we can have some assumptions, we can make some educated guesses, but is very difficult to foresee when this will end and how this will end
- in the future, what we have to anticipate is what will be the results if the system will be overloaded and will not be able to sustain and to do over the services beyond the Covid-19
- as insurance companies, we are not doing surgery, we buy services for the clients because sometimes, even in Georgia, is confused that the insurance company is delivering medical services
Jason Nick Shing LAU, Partner, Corporate Entrepreneurship, CORE Strateji:
- Digitalization is shifting all facets of the insurance business and their interactions with customers
- While we are all enamored with technology, we still tend to think about incremental changes and only expect incremental improvements
- Customer expectations have transitioned from products to personal goals by helping customers to embrace the brand with a focus on generating demand and capturing market share, helping customers to have a great experience with a focus on satisfaction and retention
- The perspective of customer journeys and experiences is changing as insurance seeks to become more embedded in the entire life experience of customers and stay alive
Desislav DANOV, Fintechguardian NGO:
- In terms of Insurtech, last year it could be one of the possible solutions for the insurance companies to move forward, but for the moment, after this Covid-19 crisis, this is the only way the insurance companies could maintain their presence on the market
- The Insurtech is just a solution, but the main driver behind the changes that are coming towards us, is the digitalization
- Digitalization rearranges the way we interact with each other, with institutions, the way we perceive the world and Insurtech is just one of the parts of these new arrangements
Prof. Klime POPOSKI, Insurance department of St. Kliment Ohridski University, Macedonia:
- The emergence of large numbers of Insurtech or start-ups offering a wide derivates solutions and capabilities is an opportunity for insurance companies to innovate through collaboration
- Digitalization has an impact on consumer protection and the extend to which customers are treated fairly from the design, underwriting and price of the products, their marketing and distribution to the claims processing and ongoing management of customers.
- The use of automate online device will potentially improve accessibility of products to the customers; it will however require a proper design of underline algorithms and adequate availability and use of customer data
- It is recommended the need of supervisors to develop, understanding of how innovation work and to insure a proper assessment of new product and business models
The event was produced and organized by XPRIMM, with the official support of the Insurance State Supervision Service of Georgia and FIIAPP, and our partners:
- Main Partners: EUROINS, Green Insurance Georgia
- Partners: Benefits, Recrex, Crawford, IRAO Vienna Insurance Group, MAI CEE Insurance Brokers, ARDI, IMEDIL Health Insurance, Alpha Insurance Company