Record Insurance Payout Looms after Gen-Z Protest Damage

Nepal’s insurance sector faces its largest-ever single-incident payout after extensive property damage during the recent Gen Z protest, according to figures released by the Nepal Insurance Authority (NIA).

Claims have already reached Rs 20.7 billion as of Tuesday, with insurers warning that the total will climb further as assessments of commercial and private property losses continue. Fourteen non-life and four micro-insurance companies have so far received 1,984 claims.

The largest claims is at the Nepal branch of India’s Oriental Insurance Company, which has logged 40 claims totaling Rs 5.15 billion. The company insured the five-star Hotel Hilton, which suffered the biggest individual loss.

The Gen-Z protest damage now exceeds claims from Nepal’s 2015 earthquake, which generated over Rs 16 billion in payouts, and matches or tops other major events: the 2020 COVID-19 claims of around Rs 16 billion, the 2024 monsoon floods and landslides at Rs 12.27 billion, the Tikathali protests in March at Rs 450 million, and the June Bhotekoshi flood at Rs 585.9 million.

Violence erupted last Monday, September 8, when police crackdowns left dozens dead, sparking public anger and mass defiance of a curfew the following day. Rioters set fire to the Hilton Kathmandu, 21 Bhattabhateni stores, Ncell’s central office, Global College, Ullens School, the Central Business Park in Thapathali, and multiple auto showrooms of Hyundai, Suzuki, and Tata Motors. Chaudhary Group’s factory, cable car stations at Chandragiri and Maulakalika, numerous corporate buildings, and private residences were also damaged. Looters stole 18 kilograms of gold and Rs 50 million from the Baneshwar branch of Rastriya Banijya Bank.

Executive Director Sushildev Subedi of the NIA said most affected private properties were insured, driving the unprecedented number and value of claims.

Heavy Burden on Domestic Reinsurers

The damage falls under riot and terrorism coverage, which must be included in property policies. Because these risks are not reinsured abroad, liabilities rest primarily with Nepal Reinsurance Company and the insurers themselves. Companies typically retain 35 percent of such risk and cede 65 percent to Nepal Re.

Nepal Re CEO Surendra Thapa said the reinsurer has placed part of its exposure with overseas partners, including Hannover Re, ensuring it can meet obligations. He declined to specify the amount ceded internationally.

The record payout underscores both the financial impact of the Gen-Z protests and the pressure on Nepal’s domestic insurance and reinsurance market.