Georgia Healthcare Group announces the acquisition of two largest corporate medical insurance clients
Georgia Healthcare Group (the “Group” or “GHG”) announces that its medical insurance business has recently won two large tenders, retaining the country’s largest insurance client - the Ministry of Internal Affairs (“MIA”) with c.75,000 insured and acquiring a significant new corporate client – the Ministry of Defense (“MOD”) with c.60,000 insured. As a result, we expect the number of GHG’s insured individuals to increase and reach approximately 230,000 in 2019.
The MIA contract was initially won in December 2017 for a one-year term and the contract has been successfully extended for another year (FY 2019). By incentivising the use of GHG healthcare facilities the contract generated significant synergies in 2018, increasing the claims retention rate within the Group by 320 bps y-o-y in 9M18, reaching 38.6%.
The MOD contract, previously one of our largest insured clients, was allowed to expire in January 2017 due to its high loss ratio. This year, due to renegotiated contractual terms and applying incentives similar to the MIA contract, we expect significant additional synergies to arise from the MOD contract as well.
“Our medical insurance business has implemented significant initiatives and changes during the last 18 months, which has resulted in a solid contribution to the Group’s EBITDA and profit. Today, I am very pleased to see that these positive trends continue to support our business expansion strategy. With the increased client base GHG’s insurance business became the largest private payer in the healthcare sector, further ensuring profitable growth and significant synergies across the Group.” commented Nikoloz Gamkrelidze, CEO of Georgia Healthcare Group.