The FINANCIAL -- According to the leading Georgian insurance companies ALDAGI BCI and GPI Holding the most popular insurance product in Georgia is health insurance.
“Insurance is an act of providing financial protection for property, life and health. Health is a most valuable thing for any person, thus health insurance means to protect oneself from financial expenses that can arise from any sudden accident or illness which a person would not be able to afford alone. The leading business line of ALDAGI BCI portfolio is health insurance,” Nikoloz Gamkrelidze, General Director of ALDAGI BCI declared to The FINANCIAL.
According to Paata Lomadze, Marketing Director of GPI Holding, health insurance volume amongst the Georgian population is growing continuously.
“Today GPI Holding has more than 100 thousand insured people. The figure globally increased in 2006, when the company insured 50 thousand socially unprotected citizens of Georgia in the frame of a municipal program. According to the third quarter’s plural data 2007, approximately 20 thousand socially unprotected people were insured this year,” Lomadze said.
According to Gamkrelidze, in recent years the government supports private insurance market development in Georgia. As a result there has been a growth of awareness not only in the capital of Georgia, but in the regions as well.
“The best promotion of ALDAGI BCI is claims reimbursed to our clients. Satisfied clients are indirect benefits of the company, as it is a guarantee of future cooperation,” Gamkrelidze declared.
“Today the company has insured 150 thousand individual clients in the frame of health insurance. More and more people in Georgia realize advantages of insurance services. The popularity of insurance raised by the support of the government, economical development and companies that are becoming more innovative and active,” Gamkrelidze added.
According to Lomadze, several reasons of scale increasing exist: the country’s economical development has caused insurance business transparency, increasing level of income of the population provides that insurance premiums (monthly payments) are paid both by the employers and employees and the population is really benefiting from the insurance.
“Governmental insurance projects cooperating with private insurance companies increased the number of insured people in the regions of Georgia. These features have made insurance far more popular with the population. Insurance services offered by the companies increases the interest among the population and they buy other insurance programs as well”, Lomadze added.
“ALDAGI BCI offers a comprehensive health insurance program. This program covers nearly all medical services, among them: Family Doctor Service, Outpatients Treatment, Hospital Treatment, and Provision with Medicines. Price depends on the services selected by the insured, insurance terms, age, gender, health condition, etc. If the insured selects a comprehensive packet, the price is relatively high. The prices range from GEL 3 up to USD 40-50, or even more if you buy worldwide health insurance package” Gamkrelidze declared.
“Health insurance remains the most popular service at the current moment, which is then followed by auto insurance. Health insurance pays for expenses incurred for diagnosis and treatment of covered medical conditions. There are many different types of health insurance plans available at Georgian insurance companies. A customer can fit the insurance system to his/her specific needs, budget, and lifestyle,” Lomadze said.
According of Lomadze, the source of health insurance popularity is low prices and good services skills offered by the companies.
“At GPI Holding a person can insure their health from GEL 3 to up to USD 50. At the moment a package costing USD 50 is the most expensive health insurance product on offer. However according to the company’s statistics the average monthly payment consists of GEL 15,” Lomadze said.
“Today most of the GPI Holding Insurance Company’s customers are companies, buying health insuring packages for their employees, although at the moment the company has started up an individual insurance program POLICY MEDI, which will supposedly increase the number of individual clients in the nearest future. The company’s corporate clients include British Petroleum, Geocell, Magticom, TBC Bank, the Marriott, etc,” Lomadze added.
According to Gamkrelidze, ALDAGI BCI is oriented on the retail market and the company plans to increase its number of individual clients.
“To penetrate the retail insurance market, the company introduced the new retail brand Chemebi in 2006. Chemebi has been a success in the retail market from the very beginning. And by the end of 2006, this relatively new brand, turned to be the winner of the Golden Brand 2006 awards meaning Chemebi became - Georgia’s favourite insurance program due to creative focus of the brand. Health insurance popularity is caused especially if considering the rising cost of health care over the past few years. An illness can be financially devastating for a person, while insuring is the best way to avoid such a situation,” Gamkrelidze said.
“ALDAGI BCI, a vertically integrated insurance company, opened a clinic in 2006 which mostly serves the insured customers of Aldagi BCI. The clinic is one of the best diagnostic centres in Tbilisi. Today we have a chain of My Family clinics, where clients’ health monitoring is carried out by highly qualified and certified physicians,” Gamkrelidze added.
According to Gamkrelidze, clinic staff is composed of consultants and various specialists covering all fields of medicine, each having been exclusively selected. The clinic is equipped with modern equipment.
“All these factors ensure that clinic customers enjoy high quality service in a comfortable environment without wasting much time on procedure. New clinics will be opened in Batumi, Tbilisi and Kutaisi by 2008. ALDAGI BCI plans to purchase one of the leading hospitals in Tbilisi, which will serve not only insured people but other customers as well,” Gamkrelidze declared.
According to GPI Holding, the company is one of the leading companies in health insurance on the Georgian market. In 2006, GPI Holding has covered a more than GEL 6 million cost of medical expenses. Globally the company has covered USD 3, 913, 838 insuring expenses.
GPI Holding published the third quarter’s plural data of 2007. The quantity of bought insuring premiums consisted of USD 11, 526, 457 in 2007, this figure increased by 41% compared to the previous year. Most of the part of GPI Holdings’ portfolio is occupied by health insurance; the sales index of health insuring products consisted of 43% of the company’s whole sales.
According to the third quarter’s statistics GPI Holding occupies 24% of the Georgian insuring market. The leader company is ALDAGI BCI, with 36.2% market share.
“The Georgian market is represented by 15 licensed companies at the current moment. Although approximately 4-5 companies are ALDAGI BCI rivals. The main competitor among them is GPI Holding. In 2006, ALDAGI and BCI merged; the aim of the companies was to keep the market share after merger. The company managed it successfully,” Gamkrelidze declared.
According to Lomadze, GPI Holding (Vienna Insurance Group) was founded in 2001, a time when insurance business already had a definite history in Georgia. For that period the leading aspects were: obligatory property and auto insurance.
“Many insurance products were less developed, for instance pension insurance. GPI Holding was the first company to have implemented non-obligatory pension insurance on the market. At the starting level the scales were small compared to the present moment,” Lomadze added.
According to Gamkrelidze, ALDAGI BCI originated in 1990. It was Aldagi BCI which promoted not only the foundation of the private insurance market in Georgia but also the popularization of health insurance among the Georgian population. Popularity caused a rise in the insurance market dynamics. For the last three years the company has had 35-40% annual growth. The figures’ growth speaks for the company’s success. In 2003, the insurance market was about GEL 30 million and in 2007, had already reached GEL 105 million.
“To estimate insurance business profitability is very difficult at this stage, as not all insuring companies lead publicly transparent business. In total the Georgian insuring market is represented by 14-15 companies, but only two of those uphold world acknowledged standards: Aldagi BCI and GPI Holding. As far as GPI Holding is concerned, the insurance business is a profitable one,” Lomadze said.
“ALDAGI BCI has declared that the insurance business is profitable for the company,” Gamkrelidze stated.