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Insurers Leaving Agro- insurance Program

About 2 months have passed since the agro-insurance project was launched, and during  this period 6 000 policies have already been issued.According to  the Project Management Agency under the Ministry of Agriculture of Georgia, the number of issued policies will grow when  insurance companies will get more information about the program,.

However, despite the optimism of officials, an attitude of private companies to the program is ambiguous. In particular, “Cartu-insurance” has withdrawn  from  the agricultural insurance program, however, the company’s management has not made any  explanation in this regard.

The Agency states that in overall the  project is successful, and one  company’s withdrawal is not something special and dangerous.

“This is a normal process, someone will participate, and someone will leave the program. Nothing specialhappens, “- the Agency states.

At this stage, within the framework of agricultural insurance, the two insurance companies – “GPI-Holding” and “ALDAGI”  have  to offset losses in the two Black Sea regions affected by the disaster – the amount will be known in the coming days.

In general, the efficiency of agricultural insurance program is estimated differently.

In particular, according to the General Director of “IC Group” George Shengelia, an interest in the program is pretty big. According to the Head of Public Relations Service Tina Stambolishvili, the company is actively working in three regions of the country.

The insurance company “Irao” claims that everything is going according to plan and the project can be considered successful – the company began to work within  the program at the beginning of October and is not yet able to summarize sales at this stage.

 “ALDAGI” has  not commented on the results of the program and claims that they will be able to  say something definite later, after the first results will be announced.

According to President at Georgian Insurance Institute George Gigolashvili, agro- insurance project has started recently, but it can hardly be considered successful.

“Agro-insurance is  still a new phenomenon and it means that we shouldn’t expect specific results. In any, even the most developed country, the system of agricultural insurance was not created in a short time. Especially in Georgia where the insurance culture is very conservative and inert. The health insurance is the  most popular service in the country , followed by  auto insurance with a very large backlog as from nearly one  million cars only 40 000 are insured in Georgia, in most cases this is due to the conditions set by car dealers and banks, and not the personal initiative of citizens. In the case of agricultural insurance, we are dealing with the peasants and farmers who have no experience in this field. In the regions, an access to information on insurance services and the possibility of contact with the insurance sector is limited. Apart from that, the peasants and farmers almost have no risk management. Accordingly, in one last month is not possible to get hundreds of thousands of customers, not only in Georgia, but also anywhere in the world “- he notes.

He believes  there are two ways out of this situation – the first  is an active information campaign, which will stretch over time, as the mentality cannot change in one  month. Second – to oblige all farmers participating in the preferential  agro-credit program to use agricultural insurance.

According to the head of the Parliamentary Committee on Agrarian Policy Gigla Agulashvili , the agro- insurance program  is  pilot, and it is too early to draw any conclusions about its effectiveness.