January 26: The business of non-life insurance companies increased by 23 percent in a one-month period from mid-December to mid-January (Nepali month of Poush) compared to the preceding month (Mangshir).

The business of insurance companies improved due to the increase in domestic economic activities.

According to the Nepal Insurance Authority, non-life insurance companies collected insurance premium worth Rs 3.67 billion in the review month. The insurance companies had collected only Rs 2.99 billion between mid-November and mid-December.

Currently, 14 non-life insurance companies are operational in the country.

In the review month, Shikhar Insurance Company collected the highest insurance premium of Rs 873.1 million while Rastriya Beema Company collected the least insurance premium of Rs 67.2 million.

Although the insurance premium collection of the insurance companies increased in the review month, the insurance policies issued during this period declined. The non-life insurance companies had issued a total of 272,358 insurance policies in mid-November to mid-December which dropped to 259,815 in mid-December to mid-January.

As of mid-January of the current fiscal year, non-life insurance companies have issued a total of 14,21,000 insurance policies and have collected Rs 19.39 billion.

There has been an excess of liquidity in banks and financial institutions of late due to increase in the inflow of remittance. As a result, banks have started to reduce the interest rates and are focused on credit expansion.

Nepal Rastra Bank has also reduced the policy rate through the review of monetary policy and has become lenient towards extending loans to the real estate and shares. The non-life insurance companies started witnessing an increase in business activities after the banks increased their credit flow.