XPRIMM: What is the cause of the 8.6% and 20% decreases of the market in 2013 and respectively in 1H2014?
Lasha NIKOLADZE: Decisions that were taken in 2013 were important for the insurance industry in terms of the state social insurance and non-insurance related obligations. These changes were reflected in the 2014 results (and, it seems an obvious reduction in the income) that actually improved to a great extent (indicator) the profitability of insurance companies. Today, we can clearly conclude that the removal of financial programs, which aggravated the financial situation of companies, caused an increase in revenue and an improvement of the balance.

XPRIMM: What can you say about the universal healthcare program?
L. N.: Georgia has chosen a model of progressive countries - universal healthcare. Universal healthcare is a top priority in global health; it is one of the most important "weapons" in the eradication of poverty and economic development. The annual program experience has been welcomed by experts of the World Bank, the World Health Organization and the United States Agency for International Development. During the introduction of the new universal healthcare program, over time insurance companies could "adapt" their corporate products to basic government programs, respectively, after the introduction of government programs in some insurance companies increased portfolio of health insurance.

XPRIMM: Insurance companies were completely removed from the government programs. Are they faced with serious financial problems?
L. N.: By phasing out the "inflow" of insured, insurance companies completely get out from the social health insurance project. As a result, since September 1st, 2014 universal insurance programs have been administrated by the Social Service Agency. Disadvantages of the project management of some companies have been caused by a series of reasons, namely that a few factors were not taken into account: the insolvency of companies, the management capacity, the lack of experience in the medical services sector, the difficulties in the implementation of large-scale projects, the difficulties in relationship with other health providers and in attracting investment resources which often exceed the assets of the companies. The above-mentioned reasons unfortunately have caused deep financial trouble in some companies, and the management has been forced to liquidate/bankrupt them.

XPRIMM: Starting 2015 Georgia will introduce compulsory insurance MTPL. Are citizens ready for this innovation?
L. N.: At present a modeling of some projects and their recalculation is being realized with the help of actuaries. After that the actuaries will present several models we will make a selection of model based on access of insurance and the effectiveness of the payment system.

We would like to mention that this law functioned in Georgia until 2004. We have already announced the market players for the forthcoming amendments; therefore, they are making all the necessary efforts to inform their clients accordingly.

In addition, it is necessary to take into account the fact that until this law comes into force, insurance companies are planning a large-scale campaign for the information of the population that contributes to the effective implementation of compulsory insurance.

Also, it should be noted that MTPL will occupy an important place in the portfolio of insurance companies in the field of non-life insurance. At the same time, this type of insurance helps to protect the population and to prepare the Georgian legislation on insurance to get closer the relevant EU legislation.

XPRIMM: What legislative changes took place in 2013 and are in progress in 2014?
L. N.: In 2013 some changes in the regulatory frame work were already done and planned till the end of 2014, aiming at: the capital adequacy of insurance companies, the introduction of corporate management, the increase in the solvency of companies and the protection of the interests of the insured.

XPRIMM: How has the crisis affected the development of the local market?
L. N.: Basically the crisis affected the banking system; therefore, this situation is reflected in the cross-selling of banking products. However, as the financial system of Georgia is not entirely integrated in the international financial institutions, we have overcome the crisis in a relatively short period of time.

XPRIMM: What do you expect for the end of 2014?
L. N.: In addition to the above-mentioned, in 2013 insurance companies made presented authentic quality reports to the management. Grasping a new perspective on the Georgian insurance industry due to past and recent experiences, not loaded with social projects and non-insurance obligations, the companies are in a new healthy financial atmosphere with intensified activities. At the same time, the introduction of new regulations is clearly promoting the growth and improvement of the insurance industry, which will appear as an attractive environment for the implementation of investment projects in this insurance.