February 3: The business of non-life insurance companies has improved in the current fiscal year. The non-life insurance companies, which lost 13 percent of their business in the first quarter of the current fiscal year due to lack of liquidity in the financial sector, improved by more than 5 percent in the second quarter.
According to the data of the Nepal Insurance Authority, non-life insurance companies issued 1,395,032 insurance policies worth around Rs 20.825 billion. Compared to the same period last year the number of insurance policies of the companies have decreased by 6.11 percent. The insurance fee on the other hand increased by 5.15 percent. By January last year those companies had issued 1,485,851insurance policies and collected Rs 19.982 billion in insurance fees.
In the Nepali month of Poush (mid-December to mid-January) of the current fiscal year, non-life insurance companies collected insurance fees of Rs 4.1 billion. The authority informed that the companies sold a total of 247,768 insurance policies during the review month. Compared to last year, the business of the companies increased by 11.79 percent as the companies collected Rs 3.67 billion in insurance fees in mid-December to mid-January during the last fiscal year.
Similarly, the business of the companies in the previous month (mid-November to mid-December) increased by 56.65 percent compared to the corresponding period of last year where the companies collected insurance fees of Rs 2.61 billion during this period. The non-life insurance business, which had been declining since the beginning of the current fiscal year, has seen an improvement in January.
According to the authority, the companies collected Rs 4.48 billion in the first month of the current FY (mid-July to mid-August), followedby Rs 3.39 billion in mid-August to mid-September, Rs 2.96 billion in mid-September to mid-October, Rs 2.51 billion in mid-October to mid-November and Rs 2.61 billion in mid-November to mid-December.
There is a provision that banks must insure the collateral taken while disbursing loans. Due to lack of liquidity, banks' credit investment is often stopped. Similarly, due to the strictness of the government on the import of vehicles, the non-life insurance business has also been affected.
Rajuraman Paudel, executive director and spokesperson for the Authority said that there has been some improvement in the non-life insurance business, which was declining due to the decline in economic activities.
How much business of which company?
According to the authority's data, out of the 18 non-life insurance companies in operation, 9 of them did business worth above a billion rupees in mid- January to mid-December. Shikhar Insurance collected the highest insurance fee of Rs 2.65 billion in the review month. Similarly, National Insurance collected the lowest insurance fee of Rs 494 million.