Top 7 Non-Life Insurance in Nepal: Comparative Study
August 21, 2020 | Investopaper
The non-life or general insurance business in Nepal is currently at a stagnant phase. Companies are facing a hard time increasing their premium collection despite the rapid expansion in networks and services. The ongoing corona-virus turmoil has cause an adverse impact in the business growth.
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At current, there are 20 non-life insurance companies operating in Nepal. Here, we will try to make a financial comparison between the top 7 general or non-life insurance in Nepal. The 7 best non-life or general insurance companies in Nepal include (not in any specific order):
- Rastriya Beema Company (RBCL)
- Sagarmatha Insurance (SIC)
- Shikhar Insurance (SICL)
- Neco Insurance (NIL)
- Siddhartha Insurance (SIL)
- Premier Insurance (PIC)
- NLG Insurance (NLG)
The comparative study will be on the basis of the unaudited fourth quarter report of the fiscal year 2076/77. We will compare the performance of these general insurance companies based on the different financial indicators such as:
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Paid-Up Capital
Shikhar Insurance has the highest paid-up capital with Rs. 137.45 crores followed by Neco Insurance with the capital of Rs. 131.74 crores. On the other hand, Rastriya Beema Company has a paid-up capital of Rs 26.66 crores only.
The table below presents the paid-up capital of the insurance companies.
| S.N. | Non-Life Insurance | Paid-up Capital (Rs. ‘crores’) |
| 1 | Shikhar Insurance | 137.45 |
| 2 | Neco Insurance | 131.74 |
| 3 | Premier Insurance | 107.46 |
| 4 | NLG Insurance | 100.85 |
| 5 | Sagarmatha Insurance | 100.12 |
| 6 | Siddhartha Insurance | 100 |
| 7 | Rastriya Beema Company | 26.66 |
Note: We have adjusted the 30 percent right share of Shikhar Insurance. Hence, the capital may differ from the quarterly report.
Reserve & Surplus and Insurance Fund
Rastriya Beema Company leads in total reserve and surplus and insurance fund with Rs. 296.86 crores and Rs. 225 crores respectively. Siddhartha Insurance has the lowest reserve of Rs. 30.14 crores while Sagarmatha Insurance is behind in insurance fund with Rs. 63.14 crores.
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The reserve and insurance fund of the 7 non life insurance companies is presented in the table below:
| S.N. | Non-Life Insurance | Reserve & Surplus (Rs. ‘crores’) | Insurance Fund (Rs. ‘crores’) |
| 1 | Rastriya Beema Company | 296.83 | 225 |
| 2 | Shikhar Insurance | 83.63 | 105.73 |
| 3 | Neco Insurance | 52.44 | 83.17 |
| 4 | Sagarmatha Insurance | 51.86 | 63.14 |
| 5 | Premier Insurance | 32.48 | 67.25 |
| 6 | NLG Insurance | 31.1 | 89.63 |
| 7 | Siddhartha Insurance | 30.14 | 82.76 |
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Total Investment
Rastriya Beema Company has Rs. 585.22 crores as a total investment that exceeds the investment of other insurance. Neco and Shikhar Insurance have a total investment of Rs. 314.81 crores and Rs. 310.78 crores respectively. NLG Insurance has the lowest investment of Rs. 216.47 crores.
The investment made by the insurance companies is shown in the table below:
| S.N. | Non-Life Insurance | Total Investments (Rs. ‘crores’) |
| 1 | Rastriya Beema Company | 585.22 |
| 2 | Neco Insurance | 314.81 |
| 3 | Shikhar Insurance | 310.78 |
| 4 | Sagarmatha Insurance | 308.41 |
| 5 | Siddhartha Insurance | 274.04 |
| 6 | Premier Insurance | 272.79 |
| 7 | NLG Insurance | 216.47 |
Note: The total investment includes both the long term and short term investments.
Total & Net Premium
Shikhar Insurance also leads in total premium collection with Rs. 352.17. Rastriya Beema Company lags behind in terms of total premium and net premium with only Rs 128.93 crores and Rs 22.46 crores. Neco Insurance has Rs 127.02 net premium which is higher than the other six insurance companies.
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The total premium and net premium income of the 7 non-life insurance is shown in the table below:
| S.N. | Non-Life Insurance | Total Premium (Rs. ‘crores’) | Net Premium (Rs. ‘crores’) |
| 1 | Shikhar Insurance | 352.17 | 118.55 |
| 2 | Sagarmatha Insurance | 219.48 | 98.41 |
| 3 | Neco Insurance | 207.36 | 127.02 |
| 4 | Siddhartha Insurance | 200.01 | 80.96 |
| 5 | NLG Insurance | 173.51 | 59.85 |
| 6 | Premier Insurance | 166.41 | 69.57 |
| 7 | Rastriya Beema Company | 128.93 | 22.46 |
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Net Claim & Total Outstanding Claim
Shikhar Insurance has paid the highest net claim of Rs. 87.47 crores while Rastriya Beema Company has the lowest net claim of Rs. 37.23 crores. Likewise, Neco Insurance has a lower total outstanding claim of Rs. 60.67 crores while Premier Insurance has a higher outstanding claim of Rs. 231.22 crores.
Note: The total outstanding claim of Rastriya Beema Company is not provided in the quarterly report.
The table below shows the net claim and total outstanding claim of the five non-life insurance:
| S.N. | Non-Life Insurance | Net Claim (Rs. ‘crores’) | Total Outstanding Claim (Rs. ‘crores’) |
| 1 | Rastriya Beema Company | 6.07 | – |
| 2 | Premier Insurance | 42.59 | 231.22 |
| 3 | NLG Insurance | 49.81 | 65.57 |
| 4 | Siddhartha Insurance | 50.06 | 69.09 |
| 5 | Sagarmatha Insurance | 50.76 | 87.67 |
| 6 | Neco Insurance | 50.87 | 60.67 |
| 7 | Shikhar Insurance | 87.47 | 80.48 |
Net Profit
In the FY 2076/77, Rastriya Beema Company has posted Rs. 63.86 crores in profit which is the highest among the non-life insurance companies. Shikhar Insurance is second with Rs 45.02 crores in profit. Likewise, NLG Insurance has earned Rs. 20.1 crores in profit which is the lowest among the 7 insurance companies.
The net profit of the five insurance is presented in the table below:
| S.N. | Non-Life Insurance | Net Profit (Rs. ‘crores’) |
| 1 | Rastriya Beema Company | 63.86 |
| 2 | Shikhar Insurance | 45.02 |
| 3 | Neco Insurance | 44.85 |
| 4 | Sagarmatha Insurance | 35.82 |
| 5 | Premier Insurance | 35.39 |
| 6 | Siddhartha Insurance | 30.02 |
| 7 | NLG Insurance | 20.1 |
Management Expenses
Shikhar Insurance has spent Rs 52.12 crores as the management expenses while Rastriya Beema Company has such expenses of Rs 19.14 crores only.
The management expenses by the insurance companies are shown below:
| S.N. | Non-Life Insurance | Management Expenses (Rs. ‘crores’) |
| 1 | Rastriya Beema Company | 19.14 |
| 2 | NLG Insurance | 23.94 |
| 3 | Premier Insurance | 25.73 |
| 4 | Sagarmatha Insurance | 29.35 |
| 5 | Neco Insurance | 33.21 |
| 6 | Siddhartha Insurance | 33.83 |
| 7 | Shikhar Insurance | 52.12 |
Number Of Insurance Policies
In the fiscal year 2076/77, Shikhar Insurance has sold the highest number of insurance policies i.e 259,554. Rastriya Beema Company on the other hand, has only issued 15,930 policies.
The number of policies sold by the insurance companies is presented in the table below:
| S.N. | Non-Life Insurance | Number Of Policies |
| 1 | Shikhar Insurance | 259,554 |
| 2 | Neco Insurance | 244,874 |
| 3 | NLG Insurance | 169,837 |
| 4 | Sagarmatha Insurance | 144,281 |
| 5 | Premier Insurance | 142,457 |
| 6 | Siddhartha Insurance | 132,239 |
| 7 | Rastriya Beema Company | 15,930 |
Earnings Per Share (EPS) & Net worth Per Share
Rastriya Beema Company excels in Earnings Per Share (EPS) and per share networth with Rs. 239.49 and Rs 1,213.49. NLG has the lowest EPS of Rs. 19.93. Likewise, Premier Insurance has the lowest net-worth per share of Rs 198.68.
Likewise, Shikhar Insurance has a higher per-share net worth with Rs. 241.75. Neco Insurance has a lower per-share net-worth of Rs. 193.21.
The Earnings Per Share and Net-worth Per Share of the insurance companies is presented in the table below:
| S.N. | Non-Life Insurance | Earnings Per Share (Rs.) | Networth Per Share (Rs.) |
| 1 | Rastriya Beema Company | 239.49 | 1213.25 |
| 2 | Sagarmatha Insurance | 35.78 | 227.95 |
| 3 | Neco Insurance | 34.05 | 208.96 |
| 4 | Premier Insurance | 32.93 | 198.68 |
| 5 | Shikhar Insurance | 32.75 | 244.63 |
| 6 | Siddhartha Insurance | 30.02 | 222.38 |
| 7 | NLG Insurance | 19.93 | 227.2 |
Note: The EPS and net-worth per share of Shikhar Insurance are different from the quarterly report. This is because we have adjusted the 30 percent right share of Shikhar Insurance as it has already issued the right share to the shareholders.
Market Price Per Share, P/E Ratio & Market Capitalization
Rastriya Beema Company has the highest share price, P/E ratio and market capitalization among the non-life insurance companies with Rs 9446, 39.45 and Rs 25.19 Arba respectively. Shikhar Insurance is second with Market cap of Rs 16.84 Arba. Siddhartha Insurance has the lowest share price and market cap with Rs 626 and Rs 6.26 Arba respectively.
| S.N. | Non-Life Insurance | Market Price Per Share (Rs.) | P/E Ratio | Market Capitalization (Rs. ‘In Arba’) |
| 1 | Rastriya Beema Company | 9449 | 39.45 | 25.19 |
| 2 | Shikhar Insurance | 1225 | 37.40 | 16.84 |
| 3 | Neco Insurance | 665 | 19.53 | 8.76 |
| 4 | Sagarmatha Insurance | 765 | 21.38 | 7.66 |
| 5 | Premier Insurance | 652 | 19.80 | 7 |
| 6 | NLG Insurance | 666 | 33.42 | 6.82 |
| 7 | Siddhartha Insurance | 626 | 20.85 | 6.26 |
Note: The share price is of Bhadra 3, 2077. The P/E ratio is calculated by dividing the share price of Bhadra 3 by the EPS of insurance companies maintainted at Ashad end, 2077. The market cap is computed by multiplying the listed shares at end of Ashad, 2077 and the share price [Bhadra 3, 2077].
Top 7 Non-Life Insurance in Nepal: Comparative Study
The financial comparison is also summarized in the table below:
| Headings | Rastriya Beema Company | Siddhartha Insurance | Sagarmatha Insurance | NLG Insurance | Premier Insurance | Neco Insurance | Shikhar Insurance |
| Paid-up Capital (Rs. ‘crores’) | 26.66 | 100 | 100.12 | 100.85 | 107.46 | 131.74 | 105.73 |
| Reserve & Surplus (Rs. ‘crores’) | 296.83 | 30.14 | 51.86 | 31.1 | 32.48 | 52.44 | 83.63 |
| Insurance Fund (Rs. ‘crores’) | 225 | 82.76 | 63.14 | 89.63 | 67.25 | 83.17 | 105.73 |
| Total Investments (Rs. ‘crores’) | 585.22 | 274.04 | 308.41 | 216.47 | 272.79 | 314.81 | 310.78 |
| Total Premium (Rs. ‘crores’) | 128.93 | 200.01 | 219.48 | 173.51 | 166.41 | 207.36 | 352.17 |
| Net Premium (Rs. ‘crores’) | 22.46 | 80.96 | 98.41 | 59.85 | 69.57 | 127.02 | 118.55 |
| Net Claim (Rs. ‘crores’) | 6.07 | 50.06 | 50.76 | 49.81 | 42.59 | 50.87 | 87.47 |
| Total Outstanding Claim (Rs. ‘crores’) | – | 69.09 | 87.67 | 65.57 | 231.22 | 60.67 | 80.48 |
| Net Profit (Rs. ‘crores’) | 63.86 | 30.02 | 35.82 | 20.1 | 35.39 | 44.85 | 45.02 |
| Management Expenses (Rs. ‘crores’) | 19.14 | 33.83 | 29.35 | 23.94 | 25.73 | 33.21 | 52.12 |
| Number Of Policies | 15,930 | 132,239 | 144,281 | 169,837 | 142,457 | 244,874 | 259,554 |
| Earnings Per Share (Rs.) | 239.49 | 30.02 | 35.78 | 19.93 | 32.93 | 34.05 | 32.75 |
| Networth Per Share (Rs.) | 1213.25 | 222.38 | 227.95 | 227.2 | 198.68 | 208.96 | 244.63 |
| Market Price Per Share (Rs.) [Bhadra 3, 2077] | 9449 | 626 | 765 | 666 | 652 | 665 | 1225 |
| P/E Ratio | 39.45 | 20.85 | 21.38 | 33.42 | 19.80 | 19.53 | 37.40 |
| Market Capitalization (Rs. ‘In Arba’) | 25.19 | 6.26 | 7.66 | 6.82 | 7 | 8.76 | 16.84 |
Note :
The above figures are based on the un-audited quarterly report published by the respective insurance companies. Investors are advised to take other things into consideration along with this report while making the investment decisions. The numbers may vary after the final audit.
Market Price, P/E ratio and Market Capitalization is of Bhadra 3, 2077.
Which insurance company do you prefer? Feel free to share your views in the comment section.
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कमाई राम्रो हुदो रहेछ
I prefer to invest in Neco Insurance, kindly advice me what will be in the future?