Interview
Paata LOMADZE, CEO, GPI Holding

XPRIMM: How would you comment on your company's overall performance in 2020? Did the special context created by the Covid-19 crisis have an impact on your business plan for 2020?

Paata LOMADZE: It was a challenging year for GPI Holding and the insurance industry at large. Despite the fact that we had an increase in the written premium in 2020, this was due to the Currency exchange rate fluctuation and not the increase in the number of insured persons. The main discrease was in the direction of travel insurance and CMTPL lines. In general, there was a decline in motor and property insurance lines, especially in the segment of SMEs.

It is noteworty, that the health insurance portfolio increased, as health issues remain significunt, especially consdiering the pandemic and ongoing covid cirses,

We had replanned and revisioned our strategy in the light of the corona virus pandemic, however our financial streangth and stability enabled us to not only cope with the crises, but also rapidly adopt to the market changes.

XPRIMM: Your business volume has decrease by far less than that of your competitors. Being the market leader has helped GPI in this respect? Did you implement special measures to better reach to your customers and maintain the business portfolio?

P.L.: For sure our position as a leader of market enabled us to respond to the challenges - hundreds of thousands of our clients where depended on us and we were fast and very confident in our actions. We have offered a high rate of flexibility to our insured, would that be flexible payment schedules, postponement of payments, discount and others measures. This helped our clients to cope with their financial difficulties and at the same time retain their insurance, which was so important during these demanding times.

XPRIMM: Providing good quality services to consumers has certainly been more difficult in pandemic conditions? Would you say Georgian insurers succeeded in doing it? What about GPI Holding?

P.L.: I have observed that insurance companies adopted pretty rapidly to the changes and majority of them were able to perform insurance operations to clients via online services.

In our case, it was the result of our digitalization and innovation strategy that we have pursued to transform our internal and service systems. Indeed, it was quite easy for us to literally overnight adopt to the new reality and move to online service as well as remote work. Even before the official lockdown, we put our employees and customers first and started to close offices and service centers to prevent spread of infection. This dramatic change turned into an opportunity for us, as we had been investing considerable effort and resources in altering customer behavior and encourage them to switch to online services and pandemic became a big accelerator of this shift. Even after the restrictions are lifted, majority of our clients, 80% continue to use online service, as this service far more comfortable.

XPRIMM: In your opinion, what would be the main growth drivers for the forthcoming period in your market? Are there some regulatory changes needed that might support market growth?

P.L.: The paramount issue here is the adoption of the Law on obligatory motor third party liability, which is being discussed with various bodies with the involvement of our international partners and investors and at the same time is part of the EU Agreement. Vienna Insurance Group is the largest investor in Georgia and we and our shareholders are looking forward to this commitment to be implemented as all the issues connecting with the adoption of the law are practically solved and agreed between various parties - now the Parliament has to take initiative and we will fully support the process, as we have always done in the past. Introduction or privatization of this kinds of obligatory lines gives a great boost to the development of insurance industry, as statistical data of other countries show. The law will involve millions of citizens into the insurance system and the benefits will be apparent soon, so it will encourage growth of other lines of insurance also. That's why we are really looking forward to this reform and think that it will increase motivation of other foreign investors and create hundreds of jobs.

As for the regulatory environment, I would asses it positively. Especially the regulator's current effort to increase accountability and impose new solvency rules. This is very important to streamline the capital requirements for all the insurance companies in order to protect customers of any company from financial problems.

The other very important issue is to integrate private insurance system into the state health financing system through covering certain categories of population through private insurance. Such a scheme will allow the state budget to save scarce resources and on the other hand will encourage insurance industry to grow. At the same time, such approach will positively influence the development of primary healthcare - we have seen in other countries and in or country as well as such an integration has a very positive outcome.

XPRIMM: There was already a lot of talk about the challenges, but also the opportunities raised by the pandemic situation. Beside having to fully reorganize their activity on a "work from home" basis, what do you consider the most challenging aspect? What about the opportunities?

P.L.: You are absolutely right - pandemic became a transformation factor in this direction. It was of course extremely difficult to perform this turnaround without any preparations at hand and guarantee business performance, especially in sales and service. Despite the fact that we had all the digital systems in place, cultural and psychological issues where the main challenges. However, we have won this race due to dedication and very hard work of my team and colleagues across the company.

Past 14 months of remote work was used to collect experience from this invaluable experiment and we were able to learn very quickly. Through this process of learning and improvement we are now very confident that this model with some changes will work over time and benefit our employees, customers and shareholders.

We have started a transformation process in order to introduce so called hybrid model, which is a combination of remote and office work. The process will evolve across the management, performance and customer relationship systems. This is a very interesting and exciting endeavor and I think one of the most important pivotal change for our company. First of all we want to support work-life balance and by giving an employee freedom to manage his or her time, we think that accountability, creativity and loyalty of our employees will naturally grow. Our approach is to instil trust and achieve better performance and loyalty through trust and autonomy to make decisions. The whole ecosystem that we are creating will include management systems, communication systems and better working conditions. We are now developing a concept of a new physical office, which will fit our new requirements so that time spent in the office is productive and pleasant. On the other hand, we also consider environmental and economic outcomes, such as less transport, less commute and more time spent with friends and family. I strongly believe that we will be very successful in this transformation and will pave a way for other companies in Georgia and share our example with them.

XPRIMM: What are your expectations for the year-end, in business terms, both for your company and the whole market?

P.L.: Lifting certain restrictions have already resulted in slight recovery of the economy, tourism industry in particular. Companies slowly started to generate more wealth and I hope that insurance industry will grow at least by 10% this year. However this growth will not be enough. In my opinion a real progress we will see in 2022, should the vaccination process is performed at a desirable pace.

Interview conducted by Daniela GHETU