The Vienna Insurance Group is one of the largest listed international insurance groups in Central and Eastern Europe (CEE). The Group, which is headquartered in Vienna, operates around 50 insurance companies in 25 countries, and among them, Georgia.
CBW conducted an interview with Dr. Peter Thirring, Chairman of GPI Holding Supervisory Board, after an International Insurance Conference held in Tbilisi on March 14. Dr. Thirring discussed current challenges and growing market in Georgia:
How would you assess the dynamics of the development of the Georgian insurance market, in particular the introduction of compulsory motor third party liability insurance?
At the moment, the situation in Georgia is that insurance penetration is very low. We see that large part of population have no insurance at all. A completely different situation may be seen with the introduction of obligatory Motor TPL insurance, which will hopefully come into force at the beginning of July. This means that many who weren’t insured will now have access to insurance . Awareness about the advantages of insurance will raise dramatically. It will be our obligation, as an insurance company, to educate people on what insurance is, what are the benefits and if we are successful in this, and they see that it works, then the penetration of insurance in the Georgian market will definitely improve.
The mandatory motor liability insurance law is still being discussed in the Parliament of Georgia. What are your recommendations to increase the efficiency of the law?
My first opinion is that the law is quite useful; of course the insurance limits are still low, but it’s a good start and there is a potential to increase it in the future. From my point of view, it’s very important for you to have strong regulations, and to be careful about making mistakes, which other countries did. Investors came in that didn’t have the financial capacity to really conduct Motor TPL Insurance in the long run, and that causes problems resulting in bankruptcies. Because of that, regulators must play a strong role, we are very much in favor of strong regulation, and only then can you have participants in the insurance market who are really able to fulfill their obligations in the long run. What we need to do is to create trust with the people. I think it’s very important to see that Motor TPL works, thus people develop trust in their insurance, and that it can deal with liabilities in case they have a claim.
The Vienna Insurance Group takes a leading position in investing in Georgia, what’s your main motivation to grow and expand in this country?
The Vienna Insurance Group has listed Georgia as one of our core markets, it’s not just an investment. Of course Austria is our home region, but clearly, Central and Eastern European countries are core markets of our group. Naturally, you want to be in the top position in your core markets in the long term.
What are the main features that distinguish the Georgian Insurance companies from the other 25 countries in your group?
As I’ve mentioned, insurance penetration is extremely low. On the one side, you have a quite reasonable, growing economy, and it’s visible how the country is developing. I’m very much convinced that insurance will go hand in hand with this progress of the economy. It’s very strange that you don’t have obligatory Motor TPL insurance yet, as it’s common everywhere in the world. It’s just a matter of time before insurance will grow along with the economy, and vice versa. So we see much potential in Georgia.
What is the main challenge for companies operating on the insurance market?
First of all, the main emphasis should be on strong regulations and of course we have to make insurance more professional and to make long-run profits- this is also a challenge. From our side we are committed to transfer and share our knowledge and know-how to our companies in Georgia as we’ve been doing so far and support our companies financially and experience wise. The other major challenge is an insurance culture and awareness that has to be improved and education of our customers is yet another challenge for us.