In January-June 2023, the net profit of the Georgian insurance sector amounted to GEL 34.3 million (EUR 11.99 million), which is GEL 24 million more than in the same period last year, Business Georgia wrote. The head of the Association of Insurers, Devi Khechinashvili, speaking about the 1H results, said that the sector has problems that significantly hinder growth.

“The 1H2023 data isn’t fundamentally different from previous periods. Profits are increasing, and there is a lot of talk about this, but they are in any case less than they could be if the insurance industry were developing. If you look at the distribution of these profits, it is obvious that health insurance, which is the most popular, operates on a very small profit margin. This means that it is very difficult to develop a business, so serious changes are needed in the market, as happened all over the world at different times”, he explained.

As the head of the Association noted, the insurance market will develop when the minimum required compulsory insurance is introduced in Georgia. “Profits of the insurance sector are small, and the main reason for this is that no insurance except health insurance operates in Georgia. Life insurance has been developing rapidly recently, but this is due to mortgage lending, in which such insurance becomes mandatory. (…) In addition to the fact that the social situation does not allow people to buy quality insurance products, the problem is the lack of insurance culture, which leads to a lack of demand for good insurance packages”, said Devi Khechinashvili.

*1 EUR = 2.8591 GEL (June 30th, 2023)