Tendency of development of insurance market still continued in 2005. Georgian insurance market and professional level of insurance companies increased. Georgian insurance market made significant steps towards international integration.

According to the statistical data we can conclude that the increasing trend of all financial indicators in most classes of insurance is observed.

In 2005 total premium income of insurance companies reached 61.577.524 GEL with growth rate of 36,5% which exceeds the same indicator of the previous year.

The growth of insurance premium by years is shown on the following chart:

The growth trend is observed by premium income per capita. According to the years they were diversified as following:

From the chart you can see that the growth has still had high temp in previous years. In 2005 Insurance premiums' elasticity to G.D.P. (the ratio which shows the relationship between growth rate of premium income and the related G.D.P. growth rate) is 2 i.e. in 2005 growth of insurance industry was twice higher than growth of G.D.P.

Premium income share in growth domestic product was 0,53% in 2005. In 2004, 2003, 2002, 2001, 2000 and 1999 this indicator was 0,46%, 0,45%, 0,35%, 0,4%, 0,3% and 0,263%.

Total claims paid by all insurance companies in 2005 reached 15.951.878 million GEL, which was 25,9 % of total income. The dynamic of loss according to the years has the following structure:

On the chart you can see claims paid by insurance companies by years:

In an insurance sphere as a whole the positive increasing trend of the quality of insurance services and quantity of insurance companies is observed. The essential factor of the above-mentioned is that insurance organizations improve management. Insurance cultural level in population as well as in insurance organizations is gradually increasing which is the necessary condition for effective functioning of insurance system in the country.

On the following charts you can see the structure of Georgian insurance market according to the gross premium income by classes of insurance starting from 1997 till now.

In 2005 interest in such insurance products as Property, Health, Land and Civil Liability considerably increased. Market share of these classes of insurance is 66,7%. The following chart indicates the dynamic of total premium income in these types of insurance for the last four years.

From the chart one can clearly observe that the tendency is obviously positive and the total premiums in these main classes of insurance increase from year to year.

Reliability of high level of insurance product is caused by effective implementation of reinsurance policy. Insurance companies use balanced insurance portfolio policy by means of reinsurance which helps to compensate claims actively. In order to increase solvency of insurance companies and to distribute token risks, amount ceded in reinsurance by 13 insurance companies was 27.991.025 GEL which was 45,4% of total insurance premium.

On the chart the share of reinsurance premium to whole premium income according to the years is shown. From the chart above you can see that proportion of amounts ceded in reinsurance is almost unchangeable and is stable by years.

The analysis of the main financial indicators of the Georgian insurance market shows that Georgian insurance market is civilized, tendency of its development is gradually outlined and it proves the right direction of the on-going insurance reform which is approaching those norms and standards of insurance activities which are approbated in the world.