August 25: Four micro insurance companies have issued insurance policies worth more than Rs 70 million in just one month. According to the Nepal Insurance Authority, micro insurance companies issued insurance policies worth Rs 71.1 million in the month of Shrawan (mid-July to mid-August).

On November 27 last year, the authority had issued licenses to seven micro insurance companies, including three micro life insurance companies and four micro non-life insurance companies. Four of them have already started their business.

Micro insurance companies provide insurance to marginalized and low-income communities in remote, rural and urban areas to mitigate future risks.

According to the authority, two small life insurance companies issued 219 insurance policies worth Rs 633 million in the review month.

Guardian Micro Life Insurance Company issued 127 insurance policies and collected Rs 141,000 as first installment of insurance premium.

Similarly, Crest Micro Life Insurance Limited issued 92 insurance policies and collected Rs 64,000 insurance fee in first installment.

In the non-life insurance sector, two insurance companies issued three insurance policies worth Rs 8 million in the review month. Micro Insurance Company Limited collected Rs 10,000 as insurance premium.

Chiranjeevi Nepal, chairman of the then Insurance Board (now Nepal Insurance Authority) said that micro insurance is a new concept in Nepal. According to Nepal, if the insurance authority separates the work by understanding the essence of the micro insurance companies according to international practice, the new micro insurance companies will help to further expand the scope of insurance.

“The authorities must study and make standards to separate the areas of life and non-life insurance companies that are operated by micro insurance companies. The central bank has also fixed the area where microfinance companies can work," he says. "If the authority also fixes the scope for micro insurance companies to work, these companies will be of more help in the development and expansion of the insurance sector."

Chirayu Bhandari, Chief Executive Officer (CEO) of Guardian Micro Life Insurance, said that there is immense potential in micro insurance in Nepal. Guardian Micro has issued 127 insurance policies within 5-6 days of its operation,'' he said.

He said that since the main target group of micro insurance companies is the low-income group, awareness about micro insurance is necessary. 

According to Bhandari, Guardian Micro Insurance Company has done all the necessary works to deliver services through the mobile app and therefore insurance policy can be purchased from anywhere at any time. Similarly, the company said they have made all the works paperless to facilitate the service for the insured.