“Georgian insurance companies will be under foreign ownership in five years time, provided a peaceful situation reigns in Georgia,” said Devi Khechinashvili, Head of the Georgian Insurance Association.
“If it were not for the war, the companies would already be owned by international giant conglomerates, like the situation in Hungary where companies are based in the country but owned by international companies,” said Khechinashvili. 
“The insurance field is a large global professional business. Global players enter the market with new technologies and capital. The future will show that when Georgia becomes more attractive to investors, institutional investors will be pouring money into the field. The entrance of international companies in Georgia will lead to more competition and higher quality,” Khechinashvili added.
There are 14 insurance companies based in Georgia according to the National Bank of Georgia . Out of the existing 14 companies, 11 provide life as well as non-life insurance, while the rest offer only non-life insurance.
“In the Georgian market almost all the companies, except Chartis Insurance, are based in Georgia. However many of them are partly owned by foreigners. Archimedes Global Georgia is 100% Israeli owned, and 90% of Irao is under Vienna Insurance Group,” said Khechinashvili.
“The insurance market in Georgia is lead by 5 companies: Aldagi BCI, Imedi L, GPI, Irao and IC Group. Alfa has a specific niche as it has had an important role in government programmes since the spring,” Khechinashvili declared.
According to NBG the total reimbursement amount by the companies reached 91,842,423 GEL gross (net 85,082,556) within a six month period as of June 30, 2010. The total amount of premiums bought reached 222,660,750 GEL and reinsurance premium - 26,576,130 GEL.
The market share for different insurance products is as follows: the most demanded product is health insurance making up 73.18% of the total insurance system, followed by property insurance - 9.08%, car insurance - 6.39%, liability performance insurance - 3.73%, life insurance - 1.97%, and public responsibility insurance - 1.83%. The remaining 3.82% is distributed between different products.
According to Khechinashvili 1.5 million individuals in Georgia are insured. 1,100,000 individuals are insured by government programmes, out of which 900,000 are socially vulnerable, 100,000 are teachers and 100,000 are with the Tbilisi Municipality programme. The rest are insured individually or through a corporation.
“Car insurance in Georgia is quite weak, and is mainly associated with the corporate segment or newly bought cars. The general population still has difficulty in appreciating the concept of insuring one’s car whether or not it will later come in useful. In terms of corporations, insurance is better as risks are budgeted,” added Khechinashvili.
As Khechinashvili declares, the financial crisis in 2008 did not significantly affect corporate insurance. Those who see the profitability of the business do not give it up easily. The majority of institutionally managed corporations in Georgia mainly use health insurance. Moreover property and car insurance are also actively used by corporations.
“If we look at the uninsured population, in other words 3 million out of the country’s 4.5 million, these individuals are different in terms of their income and expenditure structures. The majority of them are in difficult financial conditions and some even living under the poverty line,” said Khechinashvili.
“On the subject of inaccessibility of insurance, we should consider the actual product, which should answer the demands and expectations of the population, which is lacking today. Not only is the product unorganized, the expectations of the population do not match up to the reality,” added Khechinashvili.
“There should be closer communication between the insurance company and the customer, they should understand each others’ requests. Several aspects need to be considered, such as accessibility of insurance, infrastructure, knowledge of the product, and how should the individual use insurance in the right way. There is a huge lack of awareness for the 3 million uninsured, consequently their demands are inadequate,” said Khechinashvili.
Khechinashvili believes there should be products for which individuals will pay and moreover, individuals should consider insurance an essential part of their life. People in Georgia are not used to insurance and consequently do not see its profitability. The best advertisement is reimbursed loss.
For raising awareness within population about insurance products Georgian Insurance Association has created Insurance Guide recently.  The unit will provide answers to all questions concerning insurance and moreover, will be mediator between insurance companies and the society.
“What’s more there are some social groups which have difficulties in adapting to the insurance system, such as the elderly. For the insurance system to move to the next level, public organizations and donors should try to explain and make the products reach the expectations of the population, however, it is natural that in terms of the elderly, government subsidiaries are essential,” declared Khechinashvili.
“In America 14-15% of the population is uninsured, for several reasons. In Georgia this would be part of the population who are not formally employed, not just self-employed people in other countries, who themselves have difficulties with formal systems. In this case such people will be communally grouped and insured together. This group will be the last to join the insurance scheme,” added Khechinashvili.
The difference between European and Georgian insurance systems is that in Georgia there is mono direction - health insurance, while in developed markets diversification of products is big which brings stability to the market.
“Compared to developed markets we lack professional qualification, qualified staff, processes and systems. If within 2-3 years information deficits are eliminated and we manage to form professional educational systems the insurance system will be more efficient in the country,” declared Khechinashvili.
According to Khechinashvili the prices of insurance between Georgia, EU countries and the US are incomparable. Private insurance in the EU is expensive. Whilst in Georgia the average annual premium is 300 GEL, in the EU this is 4,000-4,500 EUR.
“In Germany, monthly social health payment is 13% of one’s income. If we take a German family of four with annual income of 40,000-60,000 EUR, the whole family pays 8,000-9,000 in insurance. In Germany the legislation says that if the monthly income of an individual exceeds 5,000 EUR they can leave the social system. However, the social system will not receive them again unless they become poor. In Germany the high-income population leaves the social system and uses individual systems, which evaluate their risks and cost on average 400-500 EUR, while in Georgia, the individual pays 25 GEL. In the USA family insurance is approximately 2,000 USD while in Georgia it is 200 GEL,” added Khechinashvili.