Non-life insurance companies in Nepal recorded a 9 percent increase in business in the first quarter of the current fiscal year (mid-July to mid-October 2024).
Data from the Nepal Insurance Authority show that 14 non-life insurance companies, excluding micro-insurers, collected a total premium of Rs 11.38 billion by mid-October. This marks an increase from Rs 10.44 billion in the same period last year, reflecting a 9.02 percent growth.
Despite the rise in premium collection, the number of policies issued has declined. By mid-October last year, these companies issued 681,464 policies, a figure which has dropped to 668,140 this year.
The increase in non-life insurance business is attributed to a boost in loan disbursements by banks and financial institutions.
According to the Nepal Rastra Bank, loan disbursements grew by 1.4 percent by mid-September, up from 0.7 percent during the same period last year. In contrast, the business growth for life insurance companies was reported at only 0.68 percent. With increased liquidity, interest rates of banks have declined, leading to higher loan disbursements.
The government’s mandate for third-party insurance, along with the requirement for banks and financial institutions to insure collateral assets and loan-utilized projects, has further driven the growth of non-life insurance companies.
Chairman of Nepal Insurers’ Association and Sagarmatha Lumbini Insurance Company’s CEO, Chunkey Chhetri noted that economic growth positively impacts the insurance industry. “This year, interest rates of banks have dropped, and loans have increased,” he said. “As economic activity rises, insurance business also strengthens.”
In the current fiscal year, Sagarmatha Lumbini Insurance has collected the highest premium among non-life insurers at Rs 1.43 billion, while National Insurance Company had collected the lowest at Rs 417.6 million.
In this year’s first quarter, Nepal Insurance Company saw the highest year-on-year growth, with premium collection increasing by 63.78 percent. Meanwhile, Prabhu Insurance Company, Himalayan Everest Insurance Company, United Ajod Insurance Company, and Sanima GIC experienced declines in premium collection.
By mid-October 2024, micro-insurance companies issued 69,790 policies and collected Rs 185.6 million in premiums, compared to 2,972 policies and Rs 9.189 million collected during the same period last year. Currently, three companies—Nepal Micro Insurance Company, Protective Micro Insurance Company, and Star Micro Insurance Company —operate in the non-life micro-insurance sector.
