October 11: Insurance companies have invested more than Rs 600 billion till the end of the last fiscal year (FY) 2079/80. According to Nepal Insurance Authority, life and non-life insurance companies have invested Rs 627 billion as of last fiscal year’s end.

The authority said their investment increased by 18.95 percent in FY 2079/80 compared to FY 2078/79, when it was Rs 527 billion.

Executive Director of Nepal Insurance Authority Raju Raman Poudel says that insurance companies are investing according to the investment guidelines issued by the authority.

“However, most of the companies are investing in fixed deposits. Companies need to invest in physical infrastructure, development, construction, tourism, agriculture, etc,” he said.

According to Poudel, some insurance companies have started investing in airline companies, agriculture and other sectors. Poudel says, “When companies invest, they should do it in areas that give safe and assured returns. That's why the authority is encouraging them to stay within the scope and diversify their investments. Life insurance companies invested Rs 568 billion in various sectors by the end of the year 2079/80.”

According to the authority, life insurance companies invested Rs 473 billion by the end of the year 2078/79, which increased by 20 percent in 2079/80.

Life insurance companies invested 77 percent (Rs 437 billion) of their total investment in term deposits of A, B and C category banks and financial institutions and infrastructure banks licensed by Nepal Rastra Bank. They have invested 7 percent (Rs 41.34 billion) in shares, bonds, debentures of banks and financial institutions of A, B and C categories licensed by Nepal Rastra Bank.

Non-life insurance companies on the other hand have invested Rs 58.85 billion in various sectors by the end of the year 2079/80. According to the authority, non-life insurance companies had invested Rs 53.91 billion by the end of FY 2078/79, which increased by 9 percent in the year 2079/80.

Non-life insurance companies invested 80 percent (Rs 47.44 billion) of the total investment in term deposits of A, B and C category banks and financial institutions and infrastructure banks licensed by Nepal Rastra Bank. Secondly, non-life insurance companies have invested about 5 percent (Rs 2.87 billion) in the ordinary shares of listed companies.