Microinsurance Pre-Feasibility Study- Georgia

This study provides the results of a demand and supply research in Georgia that focused on developing microinsurance products and structures to deliver them.

The study states that:

• In Georgia, the insurance industry is very small in terms of gross premiums;
• Yet, Georgia is abundant with insurers and a strong demand for microinsurance;
• Low and middle-income people note that their greatest unmet risks in order of priority are related to heath care financing, business risks, theft, death of a breadwinner, and income continuation for post-retirement years;
• However, confidence in the insurance industry is marginal.

There is a need to :

• Strengthen consumer protection safeguards within the current system in order to improve confidence of the market;
• Make microinsurance different from mainstream insurance;
• Educate insurers, microfinance institutions and the markets.
• Interventions that would have positive impacts in Georgia are:
  • A microinsurance brokerage firm,
  • A custodial company.

The paper concludes that:

• There is potential for knowledgeable and experienced interventions in Georgia to help guide different parties, as well as safe keep the long-term funds;
• Any intervention should be seen in terms of relatively easy expansion of a branch network into Armenia and Azerbaijan;
• This would virtually triple the potential market and would aid in the generation of economies of scale.