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Insurance Industry’s Profit Amounted to 40 Million in Three Years of Loss

In three years of loss the Georgian insurance industry logged a 40 million profit in 2014.

The insurance expert George Gigolashvili says  that in 2011 the insurance industry’s 22-million loss was caused  by the obligation to  build hospitals and an increase in appealability of the  insured, in 2012  the loss exceeded  7 million, the 2013 year was  also unprofitable for the industry which  suffered more than 3 million GEL due to the participation  in the state programs and an increased number of the citizens involved in these programs.

The situation has dramatically improved in 2014.

The agricultural insurance was introduced last year within which companies managed to earn GEL 12 million.

A total volume  of premiums raised  by the companies outside the state programs, increased from  246 to  298 million. “Aldagi” accounts for   the biggest share of the raised premiums among the insurance companies.

In order the companies’ potential to be objectively  assessed, insurance experts recommend to compare a volume of attracted premiums outside the state programs and  combine data on  “old” and “new” Aldagi” and “Imedi L”. Accordingly, as per the 2014 data, without taking into account premiums raised within the government programs in 2014, “Aldagi” leads  with  a total of GEL 104 million in premiums, in the previous year the figure reached 85 million. “GPI” earned 77 million last year  while in the previous year this figure was 58.5 million. “IRAO” – 28 million (a little more than 20 million a year earlier), “Ardi” – 23 million (22 million in 2013), “IC Group”-  17 million (12.6 million in 2013).

Mikheil Japaridze, Business Development Director at the insurance company “Ardi”, talks about  a positive trend recorded on the market – the people who declined the private insurance companies services in July 2013 have resorted to private insurance again as  over time were convinced of the  benefits of service  provided by the private sector .

Experts estimate that the largest share of 40 million profit falls on the duet of “Aldagi”  – “Imedi L” and “GPI Holding”.

As for smaller companies, who don’t  own clinics, Japaridze notes  they have to purchase medical services from their rival hospitals or pharmaceutical network, which puts them in a worse situation because of higher prices. In the world this process   is  regulated by law as the insurance and pharmaceutical companies are separated.

“Today only two or three companies are engaged in the net insurance. However, small companies are more focused on the quality of service – if the big players try to serve the client in their own clinics, others offer their customers more choice, “- Mikheil Japaridze notes.

In Japaridze’s words,  the current year will be difficult for  the insurance industry because the lari’s devaluation seriously undermined  the insurance companies. He says  the new contract prices have been increased because of the rise in medical services.