July 22, 2021 | Investopaper
While the corona epidemic is affecting every sector of the world, it does not seem to have much impact on Nepal’s insurance sector. As the companies are also operating online services, Insurance business in Nepal has grown by about 27 percent in the last fiscal year 2077/78. According to the Insurance Board, companies have collected Rs 152 billion in premiums in the last fiscal year. In the corresponding period of the previous year, the companies had collected insurance premiums of Rs 120 billion.
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Life Insurance Business In Nepal
Life insurance business has grown by 28 percent in the last fiscal year. According to the Insurance Board, 19 life insurance companies have collected Rs 120 billion by Ashad end, 2078 BS. The companies had collected Rs 94.38 billion in life insurance premiums in the corresponding period of the previous year.
In the fiscal year 2077/78, life insurance companies collected Rs 41.97 billion as the first premium income. Likewise, Rs 78.35 billion has been collected for renewal insurance premium. Similarly, they have earned Rs. 630 million from foreign employment insurance premiums.
During this period, the companies have sold 7.926 million life insurance policies. This is 10 percent more than the same period last year. However, the foreign employment term life insurance policies have declined by about 50 percent. Last year, the companies had sold 686,647 foreign employment insurance policies, compared to 1.381 million in the same period of the previous year. Due to the lockdown last year, foreign employment was completely affected which is why the number of policy sales has dropped sharply in the last fiscal year.
Non-life Insurance Business In Nepal
In the fiscal year 2077/78, twenty non-life insurance companies have collected Rs 31.70 billion in premiums. This amount is 22.54 percent more than the previous year. According to the Insurance Board, the companies had collected Rs 25.87 billion in premiums in the previous fiscal year.
During this period, non-life insurance companies issued 2.73 million insurance policies.
20 non-life insurance companies in operation are providing insurance service through their 4,935 employees and 944 branches.
Insurance Penetration In Nepal
Despite an encouraging growth witnessed in the insurance business in the last fiscal year, there was no significant increase in insurance access.
According to the Board, insurance coverage has reached about 25 percent in the fiscal year 2077/78. Including the foreign employment term life insurance policy issued by life insurance companies, the access to insurance has reached 27 percent. In the previous fiscal year, the access to insurance was 23 percent.
The Insurance Board states that the access to insurance could not increase last year due to the lockdown enforced to prevent COVID-19 pandemic
Until the end of Ashad, 2078 BS, the number of branch offices of all insurance companies operating in Nepal has reached 2,933. In the previous fiscal year, the total number of branches was 2,742. Similarly, the number of employees has reached 10,752. The paid-up capital of life insurance companies has reached Rs 38.21 billion while that of non-life insurance companies has reached Rs 19.28 billion.
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