Foreign insurance companies do not have any incentive to enter the Georgian market. CBW was told by the Chairman of the Insurance Association Devi Khechinashvili. According to him, Georgia is a unique market but needs a push.
At each meeting the government says the work in this direction should become more active, everything should be insured and so on, but actually doesn’t insure almost anything”, says Devi Khechinashvili. In his opinion, foreign insurance companies have no motivation to enter the Georgian market for two reasons.
“The Georgian market is very small. However, this is not the main reason for the lack of motivation. By 80% this is due to the lack of a mandatory insurance system. It’s a usual standard in the modern world which does not exist in our country. They know exactly what is the relationship between this system and the market development. It is important whether the government realize that insurance is an effective tool to manage the risks “, Khechinashvili says and notes that this matter is constantly being discussed with the government.
He believes populism is a very important factor in Georgian policy, mandatory insurance is considered an unpopular measure, therefore, they don’t want to take this step. In his words, foreigners fully understand what conditions must exist especially in emerging markets to provide for a good forecast and chance for the market development. “It is necessary to introduce standards and raise awareness in this regard. We very much hope that we will be able to implement the standard and the civil liability and foreign companies’ entry into the country will become relevant,” David Khechinashvili points out.
CBW reports that the insurance companies and the government have been discussing the enactment of certain forms of compulsory insurance. Among these forms are disaster insurance and driver’s third-person liability insurance. They say that the latter issue has not lost relevance and certain steps has been taken in order this compulsory form of insurance to come into effect until 2018. The information was provided by the head of the State Insurance Supervision Service Kakha Gogolashvili. He says the obligatory insurance must be introduced until 2018.