A Performance Review of Life & Non-Life Insurance Sector in Nepal
January 16, 2026 | Investopaper
The insurance sector in Nepal currently includes life insurance companies, non-life insurance companies and reinsurance companies. This study covers the growth of insurance sector (excluding reinsurance companies) in fiscal year 2081/82 as compared to the previous fiscal year 2080/81. The data is sourced from Nepal Insurance Authority.
Paid Up Capital
The table below presents the Paid Up Capital of Nepalese insurance companies showing growth from Fiscal Year 2080/81 to 2081/82. The Life Insurance sector increased from Rs. 60.08 billion to Rs. 70.09 billion, a significant rise of 16.66%, while the Non-Life Insurance sector grew more modestly from Rs. 27.80 billion to Rs. 29.35 billion, representing a 5.58% change. Consequently, the total Paid Up Capital for the industry expanded from Rs. 87.88 billion to Rs. 99.44 billion, reflecting an overall growth rate of 13.15%.
Paid Up Capital ‘in Rs. billion’
| Companies | F.Y. 2080/81 | F.Y. 2081/82 | Changes % |
|---|---|---|---|
| Life Insurance | 60.08 | 70.09 | 16.66 |
| Non Life Insurance | 27.80 | 29.35 | 5.58 |
| Total | 87.88 | 99.44 | 13.15 |
This is presented in the chart below:
Gross Premium Collection
‘in Rs. billion’
| Insurance Companies | F.Y. 2080/81 | F.Y. 2081/82 | Changes % |
|---|---|---|---|
| Life Insurance | 158.11 | 182.27 | 15.28 |
| Non Life Insurance | 39.94 | 44.91 | 12.44 |
| Total | 198.05 | 227.18 | 14.71 |
The total gross premium collection rose from Rs. 198.05 billion in FY 2080/81 to Rs. 227.18 billion in FY 2081/82, an increase of 14.71%. The Life Insurance sector, which constitutes the bulk of the market, grew by 15.28%, from Rs. 158.11 billion to Rs. 182.27 billion. Meanwhile, the Non-Life Insurance sector also expanded grew by 12.44% from Rs. 39.94 billion to Rs. 44.91 billion.
This is presented in the chart below:
Population % Covered By Life Insurance
‘in %’
| Particulars | F.Y. 2080/81 | F.Y. 2081/82 | Changes % |
|---|---|---|---|
| Excluding FE Policies | 36.53 | 39.99 | 9.47 |
| Including FE Policies | 43.27 | 48.33 | 11.69 |
The table above illustrates the growth in the percentage of the population covered by life insurance in Nepal over two fiscal years. The coverage increased from 36.53% to 39.99% when excluding Foreign Employment (FE) policies, marking a 9.47% relative increase. When FE policies are included, the coverage is significantly higher and grew from 43.27% to 48.33%, representing a more substantial relative increase of 11.69%.
Insurance Contribution to GDP (Percentage of Gross Premium to GDP)
‘in %’
| Insurance Companies | F.Y. 2080/81 | F.Y. 2081/82 | Changes % |
|---|---|---|---|
| Life Insurance | 2.74 | 2.98 | 8.76 |
| Non Life Insurance | 0.73 | 0.74 | 1.37 |
| Total | 3.47 | 3.72 | 7.20 |
The insurance industry’s contribution to Nepal’s GDP, measured as the percentage of gross premium to GDP, increased from 3.47% in FY 2080/81 to 3.72% in FY 2081/82, reflecting a 7.20% growth in its relative economic footprint. This overall growth was primarily driven by the Life Insurance sector, which saw its contribution rise from 2.74% to 2.98% (an 8.76% increase), while the Non-Life Insurance sector’s contribution remained relatively stable, growing only marginally from 0.73% to 0.74% (a 1.37% increase).
Insurance Density (Rs. Per Capita)
| Insurance Companies | F.Y. 2080/81 | F.Y. 2081/82 | Changes % |
|---|---|---|---|
| Life Insurance | 5147.24 | 5934.01 | 15.29 |
| Non Life Insurance | 1300.22 | 1462.16 | 12.45 |
| Total | 6447.46 | 7396.17 | 14.71 |
The total insurance density increased by 14.71%, from Rs. 6,447.46 to Rs. 7,396.17 per person. This aggregate rise was driven by growth in both sectors, with Life Insurance density showing the most significant increase of 15.29% (from Rs. 5,147.24 to Rs. 5,934.01) and Non-Life Insurance density growing by 12.45% (from Rs. 1,300.22 to Rs. 1,462.16).
Total Investment
| Companies | F.Y. 2080/81 | F.Y. 2081/82 | Changes % |
|---|---|---|---|
| Life Insurance | 649.12 | 759.66 | 17.03 |
| Non Life Insurance | 80.33 | 69.74 | -13.18 |
| Total | 729.45 | 829.40 | 13.70 |
The total investments grew by 13.70%, from Rs. 729.45 billion to Rs. 829.40 billion. This aggregate growth was solely driven by the Life Insurance sector, which saw a substantial 17.03% increase in investments, rising from Rs. 649.12 billion to Rs. 759.66 billion. In stark contrast, the Non-Life Insurance sector experienced a significant contraction, with its investments declining by 13.18%, from Rs. 80.33 billion to Rs. 69.74 billion.
Life Insurance Claim (Amt. in NPR Billion)
| Sub Indicators | F.Y. 2080/81 | F.Y. 2081/82 | Changes % |
|---|---|---|---|
| Nos. of Gross Claim Paid | 280151 | 302659 | 8.03 |
| Amt. of Gross Claim Paid | 65.47 | 78.98 | 20.64 |
In the life insurance sector, while the number of claims paid grew moderately by 8.03%, the total amount paid surged by 20.64% to Rs. 78.98 billion, indicating a rise in the average value per claim.
Non-Life Insurance Claim (Amt. in NPR Billion)
| Sub Indicators | F.Y. 2080/81 | F.Y. 2081/82 | Changes % |
|---|---|---|---|
| Nos. of Gross Claim Paid | 151884 | 150639 | -0.82 |
| Amt. of Gross Claim Paid | 18.09 | 25.26 | 39.64 |
In the non-life sector, the number of claims paid slightly decreased by 0.82%, yet the total claim amount increased dramatically by 39.64% to Rs. 25.26 billion
Insurance Industry Workforce
| Indicator | F.Y. 2080/81 | F.Y. 2081/82 | Change % |
|---|---|---|---|
| Direct Employment | 11,951 | 12,336 | 3.22 |
| Insurance Agents | 329,572 | 404,564 | 22.75 |
| Surveyors | 1,249 | 1,311 | 4.96 |
Key Insights and Conclusion
This study reveals the growth of life and non life insurance companies (excluding reinsurance companies) operating in Nepal. In the fiscal year 2081/82, the total gross premium collection increased by 14.71% to Rs. 227.18 billion. Life insurance outperformed non-life in several areas, including premium growth (15.28%) and claims settlements. Market penetration rose modestly to 3.72% of GDP, while population coverage by life insurance reached 48.3% (including foreign employment policies). Workforce expansion was notable, particularly in insurance agents (22.75% growth). However, challenges include a decline in non-life investments (-13.18%) and a slight drop in non-life claim numbers (-0.82%).
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