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Insurance Industry has Shown a High Level of Solidarity

An interview with  the Head of the State Insurance Supervision Service  Ioseb  Gogolashvili

Tbilisi disaster was a big test for the insurance industry in Georgia. How did it cope with it?
I cannot imagine any country in the world where insurance business showed such  solidarity with the victims, and so quickly  responded to events as in  Georgia. 80% of the loss has been reimbursed to natural persons, and most importantly, insurance companies compensated the losses in full without the complicity of customers, participation is one of the conditions of the contract. Of course, first of all this became  possible due  to the goodwill and solidarity of insurers that could compensate for such large-scale losses in the short term, without bureaucratic delays.

On the other hand, it has become possible thanks to the correct policy of the state in the insurance sector, without which the private companies could not cope with such a burden.

What is  a loss of private and legal persons, and what is a percentage of compensation paid by insurance companies?
The total loss amounted to GEL 4.2 million.  For example, cars account  for 551 511 GEL, and 70% of this amount has already been repaid.  With regard to legal persons, their loss  totals  GEL 2.7 million, individuals – 235.1 million. About 80% of individuals’ losses have already been offset. Some companies have compensated for 100%  of the loss and the rest will reach this figure in the near future.

How satisfactory are these  results, taking into account the world practice?
They are unprecedented even in  the world. In the United States with its giant insurance companies the procedure of compensation  of the loss  caused by the terrorist attacks of September 11  delayed for 2 years, while Georgian insurance companies fully covered all losses. In addition, the Tbilisi disaster showed the need to introduce a system of compulsory insurance, since it is not a luxury, but a mechanism of social protection of the population.

In future, no one is safe from the disaster. How long the government  will  hope for  charity, and what can  change this reality?
First and foremost , the culture of insurance should be developed and various types of compulsory insurance introduced. Incidentally, this is not just an initiative, but also a requirement of the European Union. We are also talking about  mandatory auto insurance, insurance against disasters, including fires.

If the June 13  flood  occurred a few years ago, could the insurance business respond so quickly?
Several years ago, the insurance companies were on their last legs mainly due to the fact that we had to make a commitment for the construction of clinics. If something like that occurred then – I’m sure the insurance company would  not be able to fully cover the losses. The industry would receive a strong blow. Fortunately, now the situation is different, though, there are other challenges. The main challenge is, as I already mentioned, the introduction of several types of compulsory insurance. Tbilisi flood showed how important it is.