Strategic Report 01 Overview 02 03 04 Market competition Hospitals and clinics Referral hospitals and community clinics (Number of beds as of December 2018)1 Both state and private healthcare providers (clinics and hospitals) compete in the Georgian market with GHG in healthcare services 3,320 25% private providers accounting for the vast majority of the country’s total supply. The market is relatively Aversi 653 5% 9 fragmented, with the six largest competitors (all of which are private) accounting for only c.40% of the Vienna Insurance Group 608 5% total number of beds in the country. This may indicate further growth potential for both new and incumbent Ghudushauri-Chachava 511 4% 3 market participants through mergers and acquisitions. 2% 3 The outpatient clinics market is even more fragmented Inova 244 and no competitor controls more than a 1% market PSP 145 1% 1 share, with the Group’s own market share at 3%. Therefore, it is likely that there will be further Other 7,871 58% 18 consolidation and emergence of a large participant in the market via mergers and acquisitions. Market share Pharma market Pharmacy and distribution Revenue in 2017 (GEL million)2 The pharmaceutical market in Georgia is highly concentrated, three major players holding GHG in pharma 450 30% approximately 75% of the market share. Two main competitors in the pharma market are also present PSP 443 29% in the hospital and medical insurance markets, with much smaller market shares than GHG. GHG therefore Aversi 277 18% remains the only large player across all these markets as the competitors have not managed so far to Other 387 23% establish scalable businesses in all respective sectors. Market share Medical insurance market Medical Insurance Gross premium revenue in 9M18 (GEL million)3 As of 30 September 2018, c.554,000 voluntary medical insurance packages have been reported to Vienna Insurance Group 54 36% the Insurance State Supervision Service of Georgia. The Georgian insurance market is represented by GHG in medical insurance 40 27% 17 companies, 12 of which operate in the health insurance segment. The market is highly concentrated, Ardi 16 11% with top three companies holding a c.75% market share by Gross Premium Revenues (“GPR”). PSP 10 7% After winning the recent tenders and increasing its IC Group 3 2% client base starting from 2019, our medical insurance Aversi 5 3% business gained more than one-third market share by revenue and became the Country’s largest Other 21 14% medical insurer. Market share 1 NCDC, data as of December 2017, updated by GHG to include changes before 31 December 2018; excluding speciality beds. 2 Total market Frost & Sullivan analysis 2017. 3 ISSSA – market as of 30 September 2018. 33