August 18: President of Life Insurers’ Association of Nepal and Chief Executive Officer (CEO) of Citizen Life Insurance Company Limited, Poshak Raj Paudel, says that the number of policyholders surrendering insurance policies has increased due to the economic downturn.

In a conversation with New Business Age on Thursday, he said that the policyholders have been surrendering their policy to meet other financial obligations.

According to the Nepal Insurance Authority, policyholders surrendered 104,506 insurance policies worth Rs 14.27 billion in the fiscal year 2022/23 alone. In FY 2021/22, policyholders surrendered 81,860 insurance policies worth Rs 12.18 billion.

The number of people surrendering insurance policies in FY 2022/23 increased by 27.66 percent compared to FY 2021/22 while the value of insurance policies surrendered during this period increased by 17.20 percent.

CEO Poudel says that the number of people surrendering policies has increased compared to previous years because their sources of income have diminished.

"Even though the instances of policy surrender has increased, it is not a big deal compared to the size of the insurance market. Policyholders have surrendered policies worth Rs 12 to 14 billion while the market is worth Rs 650 billion,” said Poudel, adding, "The insurance sector is still growing. At present, about 45 percent of citizens have access to insurance.”