A decade of ups and downs, hard work and dedication has made this life insurer stronger for the long run.

--BY BIJAYA LAXMI DUWAL

Established in 2007, Prime Life Insurance Company Limited has performed well to become one of the successful insurance companies in the country today. The decade long journey has been a period of success for the life insurer in terms of business expansion, revitalization and organizational excellence. "Our business is growing by 22 percent annually. It is very much in line with the average growth rate of life insurance industry in the country says Manoj Kumar Bhattarai, CEO of the company.  

A report published by the ratings agency ICRA Nepal has put Prime Life at the fifth position among life insurers in Nepal. According to Bhattarai, the company tops the market position in terms of earning per share (EPS) and profitability. The company was at the ninth position before 2014 when there were only nine life insurers in the country. 

Company Background
Though it was registered in 2007 as a company, Prime Life Insurance formally started its operation on June 5, 2008. The company was promoted by different prominent business groups including Khetan Group, Laxmi Bank etc among others. "We made strong infrastructure and amplified service network widely across the country. 

However, initially the company seemed more focused on term insurance of those who were migrating for foreign employment as it was an easy, quick, and profitable business compared to conventional insurance," reveals Bhattarai.

From 2014 onwards, the company moved forward in a balanced way with equal focus on all kinds of insurance. Afterward, its growth rate gained an upward momentum in all aspects of industry average compared to other life insurers in Nepal.

Turning Point
The company witnessed many ups and downs while accelerating its business. "We went through the most difficult time during FY 2012/13 and 2013/14 when the Insurance Board asked us to conduct a Due Diligence Audit (DDA)," recalls Bhattarai, adding, "During the period, the company was not doing well due to the increasing expenses and decreasing business volume. Income was going down." Then the company initiated various awareness campaigns for the life insurance service in Nepal. Bhattarai shares, "We put a lot of effort to bring the wave of life insurance service through publicity in Nepal back then. It benefitted overall life insurance industry."

He claims, "As it spent a lot in the early days, Prime Life could become the most economical life insurance company at present in Nepal. We are now operating the business at a very low cost". According to him, the company’s graph shows 15 percent average acceleration in its business at present.

Products and Services
The company has 15 different products namely Prime Foreign Employment Term Insurance Plan, New Life Term Insurance, Sulav Money Back, Surakshit Awash Jeewan Beema, Primelife Pension Plan, PrimeLife Single and Limited Payment, Nari Jeewan Beema, Dhan Sagar, Jeewan Surakshya among others. Bhattarai says that the company has sold 1.6 million insurance policies till date. Among them, 1.4 million policies are for foreign employment insurance and 200,000 policies for other insurance. 

According to Bhattarai, it is the only company to provide insurance service dedicated to women under 'Nari Jivan Beema' in Nepal. Under the product, it provides a portion of sum assured annually to the insured on the occasion of any festival they wish. 

Likewise, the company has a product named 'Prime Life Surakshit Awash Jeewan Beema' which is an unique product on its own. With this product, the insured, while taking loan for constructing/buying home will get a life insurance of sum equal to the home loan taken from the bank.

Likewise, the product Prime Life Swornim Jeewan Beema is such that if the proposer (one who registers for a child’s insurance) is dead, the company itself continues to pay the premium till the policy is matured. Moreover, the company pays one percent of the sum assured every month to the child insured. 

"We have also developed a new and unique product which will be unveiled in the near future," shares Bhattarai.

Marketing Strategies
According to Bhattarai, the company has been following the 5 Ps (product, price, place, people and promotion) marketing strategy. "We have our own techniques for the 5 Ps. Our products are cheaper," claims Bhattarai, "We are promoting the company and its products through advertising, publicity campaigns and awareness programmes in a balanced way." 

The main objective of Prime Life Insurance is to provide efficient and trustworthy life insurance service to all the people with its tagline of ‘Prime Life Insurance Surakshit Bhabisya’. "We pay attention that even the people with low income are not deprived of our service. Therefore, we have offered a term policy of Rs 100,000 with a very low premium amount of Rs 1, 350," says Bhattarai. However, the premium amount will not be returned except in case of the death of the insured. 

Service Network 
The company has expanded its service network across the country. It has 115 network points across the nation. It has 29 branches, five regional offices and many other contact offices in the country. "We target to reach 135 network points by this year. We are in a process to formulate a five-year business plan," shares Bhattarai. According to him, the company will be adding three more branches, 15 sub branches, and around 20 contact offices in the coming days. It is also planning to have provincial offices in all the seven provinces. Bhattarai says, "We strive to provide quality insurance service at the possible local level."

Promising Financials
During the establishment of Prime Life, the minimum paid-up capital requirement, as per the Insurance Act 2049, for life insurance companies was set at Rs 250 million. "While registering the company, the regulator directed to maintain the minimum paid up capital to Rs 500 million within five years. Due to various reasons, our paid-up capital reached to the level of Rs 481million by FY 2016/17. However the regulator instructed to make minimum paid up capital of Rs 2billion and the company is able to meet the new paid-up capital requirement set by the regulator as it has sufficient reserve, operating profit, and fund collected from the auction of right shares. At present the company paid up capital is Rs 1.78 billion which will reach Rs 2 billion by mid- July 2018.

Over the last four years, the first-year premium collection grew over Rs 1.8 billion which would be around Rs 2 billion by the end of this year.

Risk management
Insurance is the process of the transfer of the risks of the insured to the insurers. According to Bhattarai, risk management in insurance is based on the pool principle. He explains that the company practices risk appetite assessment to know its risk-bearing capacity. It has reinsurance agreement with Hannover Re a German reinsurance. Under the agreement, Prime Life Insurance bears a level risk while the risk of more than retained limit is borne by the re-insurer.

"Under the arrangement, the retained also will  be undertaken as ‘catastrophic’ to assure that the claim will be paid by the re-insurer in  case of any natural calamities like flood, earthquake etc", says Bhattarai.

Life Fund Management
As per the existing investment directives, life insurance companies are required to invest a minimum 70 percent of their total fund in fixed deposits at commercial banks and or invest in bonds and securities issued  by Nepal Rastra Bank. Likewise, the insurance companies can invest 10 percent of the total premium in shares of public limited companies listed with Nepal Stock Exchange. 

 Life fund is invested in safe and secured manner as directed by the regulator. Therefore, the company can guarantee to return the sum assured back to the insured. Bhattarai adds, "We are at the seventh position on life fund basis. This also proves that we are growing vigorously."

Awareness Programmes
According to Bhattarai, Prime Life is the first domestic insurance company to increase life insurance awareness among the people with a very strong slogan  -  'Sunya Wa Tin, Bichar Garaun Ek Xin' (zero or three, let's think about it). 

To increase awareness on life insurance among the people, the company has been distributing different brochures with contents highlighting the importance of insurance. It provides 3-day training to its insurance agents, imparting on them knowledge about insurance policies and its market scenario. The company's marketing head, branch managers and also provincial office chiefs visit several places to disseminate knowledge about life insurance and its importance in securing one's future.

CSR
According to CEO Bhattarai, life insurance itself is an act of CSR and the company is carrying out CSR every day. "We provide some financial assistance to marginalized groups, organize events to create awareness about life insurance, its importance to secure life with insurance,” says Bhattarai.