Banks domination hampers the Georgian insurance market's development

Due to full domination of the big banks, the Georgian insurance sector is developing in the wrong way, - said the General director of UNISON insurance company, Vasil ARKHARADZE.

According to him, the main problem is banks' gross interference in the insurance market which creates non-competitive environment and hampers the development of the industry.

"Today our market has dominant companies which are all owned by the big banks. For example, just one big banking holding owns two companies which control 35% of the insurance market. Another several big banks are planning to enter the insurance market which will significantly increase the banks' expansion degree", said Vasil ARKHARADZE.

The General director of UNISON believes that negative effect of the banks' interference in the insurance business makes it hard for independent companies to enter the market with banks' dominant position, resulting in non-competitive environment and unavailability of insurance companies' services for customers. Besides the financial sector is out of jurisdiction of the Competition Agency and the situation is out of any control. Big corporate segment is even more destructive. Companies with large bank loans must insure their employees though the insurance companies owned by those banks.

Vasil ARKHARADZE thinks that the main measure for limitation of banks' interference and increase of small companies' influence could be restriction for banks to own non-core assets in the insurance market which would free the market from banks' domination and create competitive environment.

UNISON insurance company is included in TOP-10 Georgian insurers by GWP among total 16 companies, representing the Georgian insurance market.



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