October 9: The business of non-life insurance companies in Nepal is focused on vehicle insurance and property insurance. According to the Nepal Insurance Authority, 80 percent of the insurance policies issued in the first two months of the current fiscal year (FY 2023/24) involve vehicle insurance and property insurance. Experts in this field say that vehicle and property insurances are compulsory as compared to other insurances.

According to the authority, 409,080 insurance policies have been issued in two months of the current fiscal year. Among them, 79.44 percent of the insurance policies are related to vehicle insurance and property insurance.

In mid-July to mid-September, insurance companies have issued a total of 233,860 (57 percent) vehicle insurance and 91,101 (22 percent) property insurance.

The lowest is the air insurance policy issued in the review period. During this period, 18 insurance policies of air insurance were issued.

According to the authority, 76 percent of the 445,371 insurance policies issued during the corresponding period of last fiscal year were vehicle and property insurance.

In the first two months of the current fiscal year, non-life insurance companies have collected a total of Rs 7.80 billion through insurance premium including 28.06 percent (Rs 1. 98 billion) collected from vehicle insurance and 26.76 percent (Rs 1.89 billion) from property insurance.

Former Chairman of Nepal Insurance Authority Chiranjeevi Chapagain says that since vehicle and property insurance are compulsory, the issuance of insurance policies is higher in these two segments than other types of insurances.

“Vehicle and property insurance is mandatory in Nepal. The Transporttion Act itself has mentioned that vehicle insurance should be made compulsory," he said, adding, "Similarly, the central bank has also made property insurance compulsory when taking a loan from banks."

Chapagain says that instead of making insurance mandatory, it should be encouraged to do so spontaneously. "In order to encourage insurance spontaneously, it is necessary for companies to increase credibility by paying claims on time," says Chapagain.