National Insurance, one of the oldest non-life insurance companies, will be completing its four decades of services in Nepal on 1st January 2014 and 107 years of globally on 6th December 2013. It is the 10th largest non-life insurance companies in Nepal. It has been providing services through its 8 branches across the nation and has plans for massive expansion in the pipeline. It is growing at the rate of around 32% percent. Company’s total turnover last year remained 48 Crores and it aims for a 65 Crores turnover in the current fiscal. Angila Sharma of New Business Age recently held discussion with Dr Pronab Sen, CEO of National Insurance, on the company’s journey in Nepal so far and into issues related to non-life insurance. Excerpts:

 

How do you look at your life for the last two years in Nepal? Tell us about your experiences here.

I am really enjoying my stay here in Nepal because there is tremendous scope of Non life insurance business in Nepal. It has been really very encouraging and interesting.

 

What are your views on the philosophy and need of insurance, both life and non-life?

We deal with uncertainties in Non Life Insurance and Insurance also act as a tool for balancing economy. Eg. Placing the insured in case of any accidental loss to the same position in which it was just before the accident so as to enable the insured to carry on their business as usual.

 

National Insurance is largely in the domain of non-life insurance. What has the company done to raise awareness of getting insured among people?

Penetration of Non Life insurance business in Nepal is Less than 1% and I personally feel that it there is lack of awareness about insurance. We have to reach out to masses and make them understand the need of insurance so that people are  motivated to take insurance cover. That is the most important thing we need to do since there is huge untapped potential. 

 

We are trying to raise the awareness by way of arranging Customers meet, Workshops, Publicity through various forms of media, interaction sessions with students to build insurance awareness while they are young. This year we are also going to arrange rural awareness camps in different villages. 

 

Your company operates in non-life insurance sector. What is it doing to create awareness about the necessity of non-life insurance among the people and business houses? 

In addition to the points mentioned above, We are also  trying to understand the need of people and accordingly suggest them our suitable policies which will be helpful to our existing as well as proposed new clients.

 

 There are almost 17 insurance companies operating Nepal’s non-life insurance sector. What are your company’s bragging rights in the niche? 

In Nepal, we are one of the oldest insurance companies operating since 1st January 1974 and we have been operating in India since 1906. We are different from other players in terms of our experience, expertise, our retention capacities, strong financials, investment base and less dependence on Reinsurers.              

 

People still fear that insurance companies have long procedures when it comes to pay-back time. Time-bound claim settlements are very few. What do you have to say about it?

I agree that this is the present mind set of people and the question you have asked is very pertinent. I strongly believe that perceived fear is more than real fear. To combat this situation, In National Insurance, We have started our Centralized claim processing hub in Kathmandu. All claims reported across Nepal are forwarded to the claims hub. The surveyors are deputed from the Hub and claims are constantly monitored at all level till the same is settled. 

 

The main aim is to reduce the TAT and ensure that we have simple procedures, render prompt and hassle free services.  Now, technology has improved and as such, we have also started paying claims  through ECS which is really quick.

 

All our NICians in Nepal are striving hard to ensure customer delight rather than customer service 

 

Please talk about the expansion of National Insurance in Nepal.

We have 8 branches till date in major cities across the nation. We are shortly opening our offices in Pokhra, Narainghat and Butwal for which we have received all regulatory approvals. Next year we will be adding another three offices. 

 

What do you have to say about the regulatory regime? What problems and challenges do its regulations pose for business here? 

Presence of regulator in any sector is very important and incase of Insurance too, it is really good for all the stake holders like Insurer, Insured, Surveyors and all cocerned. Whatever rules they make, we follow. In case of any guidance at times, we approach the regulators and get full cooperation from them. Regulatory regime is must for a disciplined market and we welcome it.

 

An year earlier, some pro-farmer insurance policies have been introduced under agricultural insurance scheme. Though its implementation has been slow, what is your view on this initiation? 

As far as agricultural insurance is concerned, it is a major step taken by Govt. of Nepal and Insurance Board of Nepal. Ours is agriculture based country and I strongly feel that economy of any country is based on agriculture. Until a year back, there was no insurance cover for the rural masses. Introduction of this scheme is really beneficial for the farmers. They will be able to run their businesses even in times of uncertainty.

 

What are the sectors you are covering under rural insurance?

We are covering cattle, livestock and crop insurance. People will agree that this is a new concept. Presently, we are in the initial phase and are working on developing strategies, how to market the policies.

 

 Insurance Board and Govt. of Nepal is rendering all possible support to establish rural insurance in Nepal and presently we are passing through the initial teething problems phase but I am confident that with the concerted efforts of all the stake holders, we will be able achieve the expected result.

 

There are obviously a lot of moral hazards in non-life insurance: insuring companies and persons causing self-inflicted damages to claim insured amount, etc. How do you tackle such challenges?

Moral hazards is present everywhere and Nepal is not an exception. It is in Nepal just like it is elsewhere. So, the important thing is how we deal with it. We keep ourselves alert. We have faced such problems in Nepal and we have solved them. We have made such clients realize of their wrong doings and cautioned them of its implications. In fact you need to keep your eyes and ears open. 

 

Compulsary third party insurance in Nepal has brought surge in vehicle insurance. Is this not insurance by compulsion, which defeats the purpose behind insurance?

As far as third party insurance is concerned, people should not take it only as a compulsion. It is an indirect way of helping the owner of the Vehicle because in case of a third party loss the quantum of claim amount is very high and if one does not have insurance, they may be required to pay a huge amount from their pocket. That is why in most of the countries it is mandatory and in the interest of the insured. It is really sad that many literate people here have not taken even this mandatory cover and I earnestly request all to make it a habit to take adequate insurance cover.

 

How can voluntary non-life insurance be enhanced? Do you conduct any promotional activities for that? What are the other possible initiatives?

As said before, awareness has to be increased. We have to come up with some sort of concept in the market, for instance, we can come up with the idea of cash-less facility in health insurance. Motor insurance etc. and very shortly, we will be introducing the same here. Similarly, through publicity and seminars, we are trying to disseminate awareness on the benefits of insurance.

 

What are the future plans of National Insurance here in Nepal? 

I am very optimistic about the growth in insurance business. We are coming up with tailor-made customized insurance policies.

 

Our expansion will also create job opportunities. Moreover, there is a good scope for young boys and girls to take up insurance selling as their career which will create indirect employment opportunity for them without any fixed working hours and they can continue with their education or other business simultaneously.