Georgia Healthcare Group PLC Annual Report 2018 Strategic Report Our business model continued Medical insurance Our medical insurance business offers a variety of medical insurance products to the Georgian population, with a wide distribution network. 230,000 We offer a broad range of comprehensive private medical insurance policies that customers can opt for instead of relying on the coverage provided under the UHC and other state- Insured clients1 funded healthcare programmes. Our products are mainly offered as corporate packages to large employers. The business plays an important feeder role for healthcare services and pharma businesses. We operate 12 branches and service centres of our medical insurance business in a number of cities and towns across Georgia. 69.7% We have been adjusting the business model of our medical insurance business since 2013, when UHC was introduced and transformed the landscape. Last year we also started new Renewal rate initiatives to adapt to the changes in the UHC introduced in 2017 that had a favourable effect on the 2018 results, when the business started to stabilise its earnings and contribute to the Group’s overall performance. By the end of 2018, the business won two large tenders, retaining the country’s largest insurance client – the Ministry of Internal Affairs (“MIA”) with c.75,000 insured, and acquiringa significant new corporate client – the Ministry of Defence (“MOD”) with c.60,000 insured. 77.3% Adding new customer base supports our business expansion strategy. With the increased client base, GHG’s insurance business became the largest private payer in the healthcare Loss ratio sector, securing further growth and significant synergies across the Group. 39.4% Retention rate within Revenue the Group (GEL million) 53.7 55.1 +2.6% 2017 2018 EBITDA and combined ratio (GEL million) 4.1 102.5% 94.0% -0.4 2017 2018 1 As of February 2019. 16