NewBiz Report
KATHMANDU, August 2

The businesses of non-life insurance companies saw a slight improvement in the last fiscal year, FY 2023/24 despite a slowdown in the overall economy affecting this sector.

According to the latest data from the Nepal Insurance Authority, non-life insurance companies collected Rs 41.46 billion in insurance premiums from the sale of around 2.97 million insurance policies in the last fiscal year, which ended on July 15.

The premiums collected was 3.11% more than that in the previous fiscal year 2022-23, when the companies had collected Rs 40.21 billion from the sale of around 2.79 million units of insurance policies. 

The decline in credit expansion from banks and financial institutions has affected the businesses of insurance companies, said Chunky Chhetri, president of the Nepal Insurers’ Association.

“It is natural for the business of insurance companies to be affected amid the slowdown in the economy as its growth is linked to the economy,” said Chhetri, adding that the NRB’ move to ease the overall economy including the insurance sector in the coming days through the monetary policy will have a positive impact  in this sector.

The central bank has brought a flexible monetary policy for the current fiscal year, giving concessions to contractors in loan repayment and blacklisting provisions. Similarly, the NRB has also extended the deadline to implement current capital loan guidelines by one year.

Three of the 14 non-life insurance companies in operation saw their businesses decline in the last fiscal year, according to the Nepal Insurance Authority. Among them, the Rastriya Beema Company, whose insurance premium collection decreased by 31%, reported the biggest decline.

Among other 11 companies who saw their businesses grow, the Oriental Insurance Company Limited remained at the top with a 44% growth.

Shikhar Insurance topped the list for doing the most business in the review period. Shikhar ranked first in insurance premium collection, which surged by 2.89% to Rs 5.47 billion in the last fiscal year compared to the previous year – FY 2022/23.

Similarly, the four non-life microinsurance companies in operation collected Rs 294.8 million in insurance premium by issuing 127,000 insurance policies in the last fiscal year.

Though the insurance authority had allowed four micro-insurances to operate in the previous fiscal year, only two came into operation in that period.

There was a growth in the businesses on microinsurance as all four companies started their business by the end of the last fiscal year, according to the authority.