|Health insurance: views of the insurance market|
|July 04, 2008|
July 4, 2008
Health insurance enjoys the biggest share of the Georgian insurance market. There are 14 insurance companies in Georgia and the majority of them are mainly concerned with health insurance services.
According to Alexander Omanadze, an analyst at the Georgian Insurance Associations, health insurance is developing in Georgia but retail marketing in this field is not profitable for the insurance companies and that is the reason why there is no demand for such a service.
Governmental and corporate insurance programs put the biggest amount of demand on the insurance companies. Omanadze continued: “The reason of this is that the people who apply for these individual insurance packages, in most cases, already have some health problems so these people are high risk.” According to him the Georgian insurance market needs much more investment to offer this service because of the risk associated with individual health insurance.
The government’s involvement in health insurance is mainly concerned with granting healthcare benefits to certain citizens who are most at risk. People who think they might fall into this category are encouraged to complete an assessment form. If they score below the cut-off point, then they qualify for a certificate. They then take the certificate to the insurance companies to get their health insurance. There are currently 800,000 citizens who receive this welfare.
According to Omanadze these citizens are entitles to emergency ambulance and hospital treatment, including surgery. The executive director of the insurance company Archimedes explained that the government pays 11.01 GEL to the insurance company for each beneficiary.
As the retail marketing in insurance is not profitable only large companies are able to offer this service to the population, such as Aldagi BCI and Vienna insurance group GPI. Omanadze continued: “Usually there is a problem of age and that’s why the majority of the companies don’t want to insure the people who are over 65 years old, because these people have more risks for their health.”
The exception is Archimedes. This relatively new insurance company is the only one to offer healthcare insurance to people over 65 as well. According to Mamuka Teneishvili, the Executive Director of Archimedes, the price of such a service will obviously be higher because of the greater likelihood of customers over 65 making claims.
As well as corporative and governmental insurance programs, the companies have special programs for specific periods of time. Archimedes has a special winter sports insurance package. The price of this service was 1 GEL for each day and person could buy this insurance depending on the length of time it was necessary.
“The insurance market is developing all the time in Georgia but the increase of the costs of medical treatment usually has negative effects on the insurance market,” says Teneishvili. The market regulates the price of insurance in Georgia and there is real competition in this field.
Omanadze said that in 2007 the insurance companies’ share in the GDP was 0.7 percent. And last year turnover in the insurance business was 120 million GEL- that is almost double compared with the previous year, when turnover totaled 70 million GEL. Of the 120 million GEL that was made in 2007, 44 million GEL was due to health insurance sales.
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