The La Manche and Pas-de Calais straits separate this island from Eurasia.

It was as foggy there three hundred years ago as it is today. The coast was soaked at times by rain and at times by the waves bringing  ships carrying cargo from different continents.

It would often rain at sea as well, winds would blow and sometimes pirates would appear. Some of the ships would turn back but others could not.

At shore, sailors from ships that were not at sea would gather in a small tavern, drink cider and make bets on whether the ship coming in would sink or not. Since the sailors had to go out to sea themselves, they left part of their stake (a watch or something like that) with the tavern owner who gave it to the winner upon his return.
This idea was further developed when the sailors decided to leave something with the owner of the tavern whenever their ship sailed. This deposit was then transferred to those who were sacrificed to the ocean or had been hurt by it.

That was 300 years ago. Today at the very same place i.e. London, Lloyd’s insurance market operates, continuing to protect the ships that are due to sail, and not only them.

Back in 1995 a fair distance away from La Manche, in Georgia, three physicists (fellow-students) and a mathematician founded an insurance company called "Imedi L".

The four friends were very well aware that the role of insurance was particularly important in a market economy. Therefore they decided to set up a western-style company in Georgia. They were able to approach one of the largest companies in the world, "ESG Re" which specializes in private insurance. The management of the company had confidence in the venture. In the beginning "ESG Re" provided consulting assistance and after two years established a closed partnership with "Imedi L", making a sizeable investment into the company without requiring a  state guarantee.

Prior to the enactment of the relevant law, insurance companies did not differ much from other limited liability companies such as shops. Then the Parliament adopted a law pursuant to which the minimal capital of an Insurance company had to be at least 500,000 Georgian Lari, of which 80% had to be in cash.

Thanks to the investment of "ESG Re", the "Imedi L Int." insurance company possesses the largest authorized capital (the equivalent of $1,800,000 US) of all Georgian insurance companies.

Despite such a large amount of authorized capital, insurance companies are obliged to cover risks which largely exceed their financial capabilities. This state of affairs is common in the insurance business.  Hence the existence of other insurance companies intended to resolve this issue.

What does this mean?

For instance, if there is an insurance company in Georgia with capital of 500,000 Lari which has insured an entity worth 5,000,000 Lari, in the event of this entity being damaged, the insurance company will be unable to cover the compensation costs. Therefore, the insurance company insures itself against such risk with a re-insurance company or at Lloyd’s market. In the above example therefore, 100,000 Lari of the risk will be borne by the insurance company and the remaining 4,900,000 Lari by the reinsurer. The premium paid by the client is distributed between the two bodies accordingly.

The activities of "Imedi L" are expanding every day. They have set up a central office conforming to international standards, opened 12 branches and the clients they insure include the "Sheraton Metechi Palace" hotel, the "Gudauri" hotel, "The Bank of Georgia", the Baku-Supsa oil pipeline running across Georgia, virtually all Georgian aviation companies, "Rustavtsementi", and "Magticom".

As far as the latter company is concerned, it is insured against any risk including no profit as a result of winding up business operations. Thus, in the event of an insurance case when mobile telephone subscribers fail to use the service and profit is lost, the sum will be compensated by "Imedi L".

However, generally there are three types of insurance: personal, property and civil responsibility.

"Imedi L" is  attempting to develop personal insurance to a greater extent, particularly medical insurance. To this end, eight medical insurance programs have been created. The cheapest one is the "Three lari program": a three lari monthly premium covers the person for 500 US dollars of hospital costs. According to the calculations of the three lari payment scheme, the aforementioned amount will only be accumulated after a period of 28 years. This means that if someone hopes to avoid going into hospital more than once in the course of this period he does not really need to be insured. But unfortunately, people do get ill and they need money for treatment. And very often the amount required is far greater than that saved for a rainy day, which has often already been spent on all sorts of odds and ends. This is because we think that nothing is going to happen to us in the short term, that we will be alive and healthy, but…

The managing director of "Imedi L", Mr. Alexander Lordkipanidze, is currently thinking of creating a special program intended to cover funeral costs. This program was extremely popular in post war England and unfortunately it would not be void of sense in Georgia either.

According to preliminary data the monthly premium is likely to be minimal. In the event of death the company will pay burial expenses. It should be noted that this does not include costs for the wake or anything of that sort, but what this sum does cover is still fairly significant.

Of no less importance is long term life insurance. For example, an individual can be insured for 10,000 US Dollars over a 10 year period; if he or she dies during this period the money will be transferred to the family in full, and if everything goes well he or she will receive a lump sum according to the premium which has been paid over the course of these years (e.g. $3000 US) as well as the additional per cent of this amount.

Once the client has reached the age of 65, the person can choose to take the money in full or convert it into a pension.

This form of insurance is widely available in the rest of the world and very shortly "Imedi L" will be able to offer this service.

Meanwhile, other problems exist. People in Georgia still do not fully understand what insurance is, what they need it for, and if they do not need it what the reason for that is. It is simply beyond their comprehension. The insurance business is seen as a guarantee of stability throughout the world. Often, if a company insures cars, it also provides for the repair of the roads on which vehicles are damaged, and in the long run it is the company that benefits. However, this requires the conditions and an environment which, as Mr. Lordkipanidze says, Georgia currently lacks.

It is interesting to find out what the company’s managing director is insured against himself. It turns out that he has medical insurance; he intends to have pension cover (as soon as an appropriate law is passed); his car is insured and after his apartment was flooded and everything was destroyed he made up his mind to insure that as well.

Water can come into our apartments too - sometimes only a little but sometimes in much greater amounts…

There are certain parts of the world where there is nothing but water and ships sail there just like they did some 300 years ago. The rain still falls as it used to, the wind still blows as it used to, and as for the ocean, it will sink a ship whether it is insured or not. It is only for us – the people standing ashore, waiting for the ships to come back, that this is important.

Tea Topuria