The FINANCIAL -- GPI Holding, one of the leading insurance companies in Georgia, increased its income by 30 percent in 2012 compared to 2011.
The amount of attracted premiums totalled GEL 75 million. Net profit reached GEL 5 million. Last year the company was busy with state insurance programmes, but this year the management intends to be more oriented towards non-state insurance.
Health insurance is still the most popular product with GPI Holding’s customers. So far, 60,000 people have corporate health insurance and 10-12,000 have auto insurance, which is the second most popular insurance product at GPI Holding.
“Great efforts were directed to state programmes as new groups, pensioners and children were added to the people insured by the state programmes,” Paata Lomadze, General Director of GPI Holding, told The FINANCIAL. “A big flow of insured people entered the insurance system and our management was concentrated on them to manage this contingent effectively. This is a high risk contingent and that is why we were maximally focused on them. In 2013 we will be concentrating on the development of non-state insurance. Our strategic segment has always been the retail segment, but in 2013-2014 GPI Holding will further strengthen its reach in this direction,” he added.
“We completed the construction of ten new hospitals in 2012 and entered into new business, which is hospital network management. This fact led to restructuring in the management of the company. The profit which the company had in 2012 came from commercial insurance products mainly. State programmes had zero profit, as the premium which the state pays to insurance companies is very low. Corporate health insurance had no profit either. All other directions were profitable and led to the company’s stable development,” Lomadze added.
“The number of our customers is steadily increasing. When I say that the company is growing, of course I mean increased customer numbers, because without customers it is impossible to have growth in the company. Our main focus is on attracting more medium and small customers and not to be centred around large companies alone,” Lomadze said.
Out of 100 nominees GPI Holding was named the winner as the favourite brand in the insurance category and was awarded a Golden Brand Award for the third time.
Q. In your opinion, which of your products will be most popular in 2013?
A. I cannot say that the situation will be significantly different. The products which were popular in 2012 will be in high demand in 2013 as well. However, we did try to bring some novelty to these directions. For example, auto insurance for old cars is more affordable now than it was previously. GPI Holding has launched doctors’ liability insurance for the retail market. We also plan to make some changes to our property insurance product. Despite these changes however, I do not think that the innovations will result in a revolution in the insurance system in general. People still find difficulty in trusting insurance companies. They find it difficult to adopt innovations. It will take time to make them properly understand the product and then the demand will come.
Car owner’s liability insurance is a very popular and needed product abroad. GPI Holding intends to bring this product to Georgia as well. Another product is Bonus in Life insurance, the alternative to which is private pension insurance. This product will come to Georgia but it first needs a proper legislative base.
Q. What about doctors’ liability insurance, why did it become necessary to bring this product to the market?
A. This product was created as we saw the need for it. Patients are filing claims for ill-treatment more frequently, there are also a lot of court cases on this. No one is insured against mistakes. However, this policy will cover financial damage of up to GEL 50,000 which the court might impose on a doctor or nurse. Professional liability insurance is widely used worldwide and almost all clinics and specialists are covered by a malpractice policy. The advantage of our policy is that every doctor or nurse can purchase this insurance independently.
About 2,000 medical professionals work at the hospitals which were built by our daughter companies. Along with these 2,000 medical professionals all the doctors in Georgia are able to use our medical liability insurance. Our consultants are holding presentations of this product and trying to raise awareness about it.
Q. GPI Holding first offered agro insurance to its customers years ago. Only now has this product become particularly in demand, why?
A. We have been offering our agro insurance product for six to seven years. In the past, the product’s target segment was large farmers. Because of poverty, small farmers were very careful about buying the proper product. As nowadays the whole direction of agriculture in the country is developing fast, this product has become more popular and in demand. The state plans to begin some incentive programmes for agriculture together with concessional loans. It is possible for agro insurance to become the leading insurance product in Georgia if the country follows the same course as many leading European countries have.
In general, the insurance sector needs support from the state. It is necessary for the state and insurance sector to cooperate more, for the Government to create proper legislative bases, and for the insurance sector to have more initiatives. Insurance is a broad social project. When an individual has financial problems, the insurance company should help him/her to solve the problems. People with problems come to us. Our role is to stand with them and relieve them of their burden.
We do our best to have proper communication with the Government. During the previous government’s tenure there was more communication but less understanding of the sector itself. However, nowadays the situation is more uncertain. There is communication but it is meaningless. It is very difficult to make an accurate prognosis of what might happen in three months for example. Maybe the new government needs more time to be explicated.
Q. GPI Holding has just become a Golden Brand winner for the third time. Golden Brand reveals and awards the companies which have achieved the utmost success in their brand’s business. What is the key to your success?
A. GPI Holding has been operating on the Georgian market for twelve years already. During these years, the company has been growing steadily without joining other companies. We had organic growth. More and more people have been getting involved in our insurance schemes. GPI Holding has tried to be a customer-oriented company from the very beginning, offering additional services to create a more comfortable environment for customers. Accordingly, our customer satisfaction index has always been stable and high. All these factors helped GPI Holding to be recognized as the favourite insurance company.
Over the years the company has been managed by the same, unchanged group, who have a patriotic attitude towards GPI Holding. The right method of approach, which the company has, avoids any financial risks that the company might have. When I say right method of approach I mean well-planned activities, creating products carefully in accordance with customers’ and the company’s needs, using reinsurance successfully.
We are indeed very proud to be receiving this award for the third time. We highly appreciate the fact that experts as well as customers named GPI Holding their favourite choice. What is most important is that this reveals a high level of loyalty and trust toward our company and this is of course inspiring. Indeed, it is the trust which we gain from our activity that has driven the progress and success of our organization over time.