“Life insurance business is a long term business and its growth and prosperity depends on focused strategic planning and proper implementation of it”


VIVEK JHA CEO
Nepal Life Insurance Company Ltd

As the numbers of internet users is rising day by day, Nepal Life Insurance Company (NLIC) is planning to go for online friendly operating systems. According to the company officials, the process has been initiated long ago and will be completed very soon. The company claims that ‘Any customer can calculate the payable premium amount through premium calculator present in the website’. Besides this, the company also has full fledged online service through the website and technologically advanced system of inter-connectivity between the head office and all branches spread all over Nepal.

“We have to take advantage of technology in every business and insurance is no exception,” said Vivek Jha, Chief Executive Officer of the NLIC. “This is why we have decided to go for website.” He added that this would be helpful for awareness of general public towards insurance.

“Life insurance business is a long term business and its growth and prosperity depends on focused strategic planning and proper implementation of it,” said CEO Jha. He added that as per the present scenario of life insurance sector in the country working towards awareness enhancement to general public is the key factor for success and a basic challenge.

The company is also in the process of launching a new website which shall be customer friendly with special features like checking one’s policy status online. NLIC has also been creating awareness through social media like facebook, twitter and you tube.


Company Background

Established under Company Act 2053 and Insurance Act 2049 as a public limited company on 2001, NLIC is the first Nepali owned life insurance Company that provides only life insurance services. Before the incorporation of the company, there were only companies that either both life and non life insurance or had foreign investors.

Incorporated by Nepali promoters, the company’s shares are owned 80 percent by major promoters and rest is owned by general punlic. The company has reinsurance treaty with ‘Hannover Re Life Reinsurance Company’, Germany for conventional policies and ‘SCOR Global Life’, France for Term Assurance Foreign Expatriate policies.Nepal Life City Center is the major investment by NLIC. City Center is claimed by the company to be the first proper mall in Nepal.

The company has an authorized capital of 100 Crore, issued capital of Rs. 50 Crore and paid up capital of Rs. 37.50 Crore to till date.Presently Nepal Life provides a bonus rate of NPR. 60-80 per thousand sum assured per annum, which the company claims the highest among life insurance companies in Nepal.

Also it has presently proposed a dividend of 126.32% to its shareholders of which as 56.32% is cash dividend and 70% bonus shares. “This has given a tremendous boost to its share price in the stock market and increased the investors’ confidence towards the company,” CEO Jha claimed.

Turning Point



The company believes last year was the major turning point for it, when it rebranded. “New logo and caption provides a better corporate image to the consumers, it was a major turning point for us”, said CEO Jha. “This gave a very vital and positive impact on gaining the confidence of the existing as well as new consumers for us”. The company had started rebranding campaigns with the slogan of “Naya Josh, Naya Soch, Naya Umang, Rato Tika, 10 on 10, Nepali haru ko pahilo rojai Nepal Life” last year.

“It was necessary for a wider awareness about the company as well as for life insurance as a whole,” shared Jha. “The campaign was able to provide a better corporate image among the existing and new consumers and gain their confidence. Furthermore, we came up with the caption ‘Kinaki Jeewan Amulya Chha (Because Life is Precious)’ projecting a broader and positive aspect of life.”


Connecting People via Own Branches

The company has more than 100 establishments all over the country. It has 20 branches in the major cities of the country to provide services to its customers.

The branches are in Kathmandu, Biratnagar, Birgunj, Butwal, Pokhara, Banepa, Narayanghat, Nepalgunj, Birtamod, Lahan, Janakpur, Mahendranagar, Ghorahi, Surkhet, Hetauda, Phidim, Urlabari, Dhangadi, Nuwakot, and Lalitpur.

Besides these branches, the company has opened many sales centers. They are spread in Manthali, Barhabishe, Charikot, Bhaktapur, Choutara, Salleri, Damak, Letang, Khandabari, Bhojpur, Chandranigapur, Gaur, Ilam, Bhadrapur, Palpa, Gulmi, Arghakhanchi, Pyuthan, Humla, Rolpa, Mugu, Bajura, Bhairahawa, Taulihawa, Sunwal, Tulsipur ghorahi, Salyan, Rukum, Chourjahari, Bhaluwang, Manahari, Sindhuli, Malangwa, Jaleshwor, Gorkha, Dhading, Bouddha, Katari, Rajbiraj, Siraha, Dadeldhura, Baitadi, Belauli, Dipayal, Lamjung, Kawasoti, Madi, Guleriya, Jumla, Bardiya, Kamdi, Jajarkot, Baglung, Damauli, Waling, Dailekh, Salli, Taplejung,Yashok,Thar pu,Tikapur, Rangeli and Kirtipur.

Human Resources

“Human Resources is our main asset,” CEO Jha shared “because, they are in direct touch with grass-root consumers.” “Leadership must emerge from people themselves,” he added. “We provide suitable environment to grow leadership in employees.”

According to him, the company has participatory style of management for important decisions regarding organizational policies, new product development etc. “We follow CRM 2 where every organizational employee is responsible for developing customer relationship and providing them the best service,” he added.

At present the company has around 250 staffs and more than 18000 active insurance agents.


Looking for Bright Future

Life Insurance in Nepal is a growing industry. There are 25 insurance companies, 16 non-life and nine life insurance companies. One Rastriya Beema Sansthan has been allowed to provide both life and non-life services. Though insurance was initiated in 1948 in Nepal, mainly due to lack of awareness, it is estimated that only around five percent are insured all over the country. CEO Jha opined that the number of insured people is even lower than five percent as some of the people are insured multiple times while some are under-insured than what they can afford. At present, it is estimated that contribution in Gross Domestic Product from insurance sector is less than two percent in Nepal.

“If we are able to spread awareness about the significance of insurance among the peoples, then insurance business has huge potential in Nepal,” he said. “To uplift insurance business, insurance companies, regulatory body and government have to join hands”.

Foreign company’s presence through their agents in Nepal and attracting Nepali customers to do insurance out of their nation, which is legally not allowed, is again a major challenge. He said, “Large numbers of people are insuring themselves with foreign companies in the trust of only the agent they do not know what will happen during the time of claim settlement and also unaware about the illegality of such practice.”
He believes that if our insurance sector can convince the people then large sum of money could be utilized for the growth of Nepali economy. He concludes, “Also at present the returns provided by Nepal Life is greater than some of the leading companies in neighbouring countries”.

“Presently even in such dire situation the investment by insurance sector is around 60 billion. So if Nepal can prioritize this sector, this figure can multiply manifold.”



Products and Marketing

NLIC has launched various types of life insurance policies. These includes Surakshit Jeevan Beema Yojana, Keta- Keti-Jeevan Beema (Shiksha and Vivah), Jeevan Laxmi- Triple Benefit with Bonus, Jeevan Sahara, Jeevan Sarathi, New Term Life Insurance, Saral Jeevan and Jeevan Jyoti.

Company believes in fair marketing of products. Generally, marketing people sell the policies by manipulating people. CEO Jha termed ‘mis-selling’ to these practice. “We believe in fair marketing strategy”, he added. “We believe in our products rather than pin pointing the loopholes of others; we trained our grass root agents to follow fair marketing practices”.



CSR Activities

In the journey of 12 years, NLIC has tried to do Corporate Service Responsibility (CSR) in different ways for instance, NLIC sponsored differently abled poet Biyog Sapkota’s ‘poem collection launch programe’. Besides this, the company has contributed for the renovation of the pond at historically significant landmark, Kamladi Ganesh Mandir. “We are planning to do some CSR activities differently, yet the concept is not finalized yet,” CEO Jha said. “In near future we will come with new and innovative style of CSR activities”."


          




Swot analysis

STRENGTH

Advanced system of inter-connectivity among branches, 18000 plus active agents, Reinsurance connectivity with world’s leading companies, diversified products, loan facilities, high bonus and solvency rate, highest Bonus Rs.60- Rs.80 per thousand per annum, Nepal Life City Centre, Well trained staff.

WEAKNESS

Low level of public awareness of the complete life insurance service among the population.

OPPORTUNITY

Growing awareness of general public, mass media to spread information, increasing education level and very low penetrated market.

THREATS

Mis-selling by foreign companies, un-healthy competition in market.