Home / Business / Devi Khechinashvili: Foreign Insurance Companies have no Incentive to Enter the Georgian Market

Devi Khechinashvili: Foreign Insurance Companies have no Incentive to Enter the Georgian Market

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.