GEORGIA: Strong devalution of GEL pushed up the insurance prices by over 30%

The local currency's devaluation let to an over 30% hike in the insurance prices, with health insurance appearing to be the most affected, reports the Georgian newspaper "The Financial". Insurers consider implementing compulsory insurance as required for the further development of the sector.

Lately, the costs of the medical supplies and services went up by 40% to 45%, putting pressure on the insurance premiums' level. In this context, IRAO, member of VIG, has increased prices of insurance products by 15-20% compared to the previous year. "Many of the components of the product pricing of this service are in direct correlation to the exchange rate. Increased prices of pharmaceutical products and medical services have had a negative impact on the rate of loss. Accordingly, this has been reflected in our company and throughout the whole of the insurance sector," a representative of the insurer stated to The Financial.

Overall, 2015 has been quite a difficult year for the Georgian insurance market. However, as the companies' representatives stated to the press, bothe VIG subsidiaries closed the year with positive results, maintaining an upswing trend. Written premiums in both the retail and corporate segment at IRAO have shown 3% growth y-o-y although the number of active policies decreased slightly. As for auto insurance, the company has seen 13% growth.

Moreover, GPI Holding representatives consider 2015 as a successful year for the company. "It has been shown in the attracted written premium and increased number of retail and corporate policyholders. Last year we implemented several important projects. The company launched the online application of auto insurance compensation. It made the process more simple, rapid and comfortable for insurers. Another innovative project was the social project of natural disaster insurance. Since Tbilisi's flooding on 13 June, 2015, we started offering this service to all auto holders. Thousands of car holders have used this service. Considering the importance of this service we will continue to offer it in 2016," said a company representative to The Financial.

As for 2016, Georgian insurers seem rather optimistic and convinced that the further development of the sector is strongly linked to the implementation of mandatory insurance services in the country. "In 2016 we expect scheduled reforms in the insurance sector will be implemented faster. This is important not only for the development of the sector, but for the improvement of general social conditions in the country. By this, I mean implementation of a mandatory policy of auto insurance which is equal to European standards," said the GPI Holding official.

Related articles


JLT Re appoints Jeremy FOX as Asia-Pacific CEO

Global reinsurance broker JLT Re announced the appointment of Jeremy FOX to the position of Chief Executive Officer (CEO) of JLT Re's Asia-Pacific unit (APAC). He will also become a member of the Reinsurance Global Executive Committee.

SAVA Re adds new member of the management board

Slovenian re/insurer SAVA Re annoucend that the appointment of Polona Pirs ZUPANCIC as member of the management board has got the Insurance Supervision Agency's (ISA) approval. She started her term of office on 14 January 2018.


"Insurance and Pensions reloaded" - the 7th EIOPA Annual Conference

The 7th EIOPA Annual Conference takes place today in Frankfurt am Main, Germany. A review of the current supervisory covergence issues and of the prospects of the Pan European Personal Pension Product are on the event's agenda, together with analyzing the ways in which regulation may enable innovation.



"IIF2017 - Insurance in the DIGITAL World" Conference took place in Vienna

"IIF2017 - Insurance in the DIGITAL World" conference brought together in Vienna well-known insurance professionals from all over the world who analyzed the latest digital trends in the industry, taking into account the fast digitalization of the financial services providers' world, in particular in the insurance field, which is creating both huge opportunities and strong challenges for the players.



Croatian Insurance Days Live

On 9 November has started in Opatija, Croatia, the 2017 edition of the Croatian Insurance Days Conference, the traditional meeting of the Croatian insurance top professionals with their European peers. XPRIMM Publications are supporting the event as Media Partners.



The 2017 Baden Baden Meeting: Short recap

The Baden-Baden meeting, one of the key events in the reinsurance calendar, has just set the final point of this year's edition. XPRIMM Publications have reported from the meeting's premises. Let's recap!


Baden Baden Headlines 3: CEE insurance markets are attractive for reinsurers

Central and Eastern Europe insurance markets are an important source of business for Lloyds, total premium income from this region increasing by EUR 64 million since 2010, pointed out the Lloyd's representative in a seminar dedicated to CEE insurance markets: "We are seeing strong growth from Czech Rep, Poland, Slovakia and Ukraine. At the same time are some contractions from Russia, Bulgaria, Romania and Hungary due to challenging trading conditions as political implications and other sanctions".


Baden Baden Headlines 2: cyber insurance market set to grow under regulatory presure; nat cat events more frequent, but losses per event are decreasing

Asian insurance market, especially the Indian market - are considered to be "the new El-Dorado" of the global re/insurance market, with rapidly expanding markets and an dynamic environment: "Indian P&C re/insurance markets are expected to grow at a pace of 15% per annum", according  to Victor PEIGNET, CEO, Global P&C, SCOR SE. The French -based reinsurer setted-up its Indian branch in 2016, after the authorisation from the local market authority - IRDAI. India's re/insurance market has become more attractive for global companies following the relaxation of regulatory requirements, and lately, "big names" in the industry entered the market by opening branches: GEN Re, SCOR, Lloyd's of London, MUNICH Re, SWISS Re, Reinsurance Group of America (RGA), HANNOVER Re, XL Catlin and others.


See all