Insurance business comprises a) Property and Casualty (P&C) insurance business, owned through Aldagi and b) medical insurance business, owned through GHG. P&C insurance business is a leading player in the local insurance market with a 28% market share in property and casualty insurance based on gross premiums as of 30-Jun-20. P&C also offers a variety of non-property and casualty products such as life insurance.
GHG is the country’s largest private medical insurer, with a 26.0% market share based on 2Q20 net insurance premiums. GHG offers a variety of medical insurance products primarily to Georgian corporate and state entities and also to retail clients. The medical insurance business plays a significant feeder role for GHG’s polyclinics, pharmacies, and hospitals. GCAP owns 100% in the insurance business as of 30-Sep-20 - reads GCAP’s recent report on Georgia Capital PLC Q20 and 9M20 results.
According to the report, “P&C and medical insurance have a broadly equal share in total earned revenues, while P&C had a 72% share in total net profit in 3Q20 (75% in 9M20). Overall, the combined ratio remained stable at 86.7% in 9M20 and was up 2.7ppts y-o-y to 87.3% in 3Q20. Net profit decreased by 28.6% y-o-y to GEL 5.4 million in 3Q20 and by 6.5% to GEL 16.1 million in 9M20, y-o-y. As a result, ROAE was 20.9% in 3Q20 (35.3% in 3Q19) and 22.2% in 9M20 (27.4% in 9M19)”.
As the report shows, the key points with P&C Insurance are GEL 5.0 million dividends paid in 3Q20 on the back of strong cash flow generation; 10.4% y-o-y decline in revenues in 3Q20 (down 6.6% y-o-y in 9M20), and rebounding trend in net premiums written from a portfolio through direct sales channels, up 3% y-o-y in 3Q20 (down 16% y-o-y in 2Q20).
As for the Medical Insurance, the report shows that the loss ratio is down 6.3 ppts y-o-y to 73.9% in 9M20 (up 1.5 ppts y-o-y to 74.9% in 3Q20), and the insurance renewal rate at 71.0% in 3Q20 and 72.6% in 9M19.
