Top 5 Non-Life Insurance in Nepal: A Financial Comparison

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. Here we will try to make a financial comparison between the top 5 highest premium grossing non-life insurance in Nepal. The insurance companies with their total premium collection include:

1. Shikhar Insurance: Rs. 176.34 crores

2. Sagarmatha Insurance: Rs. 123.99 crores

3. Neco Insurance: Rs. 115.70 crores

4. Siddhartha Insurance: Rs. 107.35 crores

5. NLG Insurance: Rs. 92.51 crores

We will compare the performance of these 5 general insurance companies based on the different financial indicators such as:

Paid-Up Capital, Reserve & Surplus and Insurance Fund

Neco Insurance has the highest paid-up capital with Rs. 131.70 crores followed by Shikhar Insurance with the capital of Rs. 105.73 crores. On the other hand, NLG Insurance has the lowest capital with Rs. 64.04 crores.

Shikhar Insurance leads in total reserve and surplus and insurance fund with Rs. 57.33 crores and Rs. 117.35 crores respectively. Siddhartha Insurance has the lowest reserve of Rs. 20.75 crores while Sagarmatha Insurance is behind in insurance fund with Rs. 62.14 crores.

Total Investment

Shikhar Insurance has Rs. 311.56 crores as a total investment that exceeds the investment of other insurance. The total investment includes both the long term and short term investments. NLG Insurance has the lowest investment of Rs. 220.01 crores.

Total & Net Premium

Shikhar Insurance also leads in total and net premium collection with Rs. 176.34 crores and Rs. 90.56 crores respectively. NLG Insurance lags behind the 4 insurance in terms of total premium and net premium. In the first six months, NLG Insurance has collected Rs. 92.51 crores and Rs. 43.42 crores as total and net premium respectively.

Net Claim & Total Outstanding Claim

Shikhar Insurance has paid the highest net claim of Rs. 46.94 crores in the 6 months while Neco Insurance has the lowest net claim of Rs. 25.85 crores. Likewise, Neco Insurance has a lower total outstanding claim of Rs. 40.37 crores while Sagarmatha Insurance has a higher outstanding claim of Rs. 84.13 crores.

Net Profit, Earnings Per Share (EPS) & Net worth Per Share

In terms of net profit, Shikhar Insurance is ahead with Rs. 23.24 crores in the six months. NLG Insurance has the lowest profit of Rs. 8.76 crores.

Shikhar Insurance also excels in Earnings Per Share (EPS) with Rs. 43.95 while NLG leads in per-share net worth with Rs. 278.21.

Which insurance company do you prefer? Feel free to share your views in the comment section.

The financial comparison is also summarized in the table below:

Top 5 Non-Life Insurance in Nepal: A Financial Comparison

HEADINGS Shikhar Sagarmatha Neco Siddhartha NLG
Paid-up Capital (Rs. ‘crores’) 105.73 100.12 131.7 100 64.04*
Reserve & Surplus (Rs. ‘crores’) 57.33 28.16 39.67 20.75 24.21
Insurance Fund  (Rs. ‘crores’) 117.35 62.14 68.98 72.32 83.61
Total Investments  (Rs. ‘crores’) 311.56 289.81 304.8 255.87 220.01
Total Premium (Rs. ‘crores’) 176.34 123.99 115.7 107.35 92.51
Net Premium  (Rs. ‘crores’) 90.56 56.83 70.99 48.07 43.42
Net Claim (Rs. ‘crores’) 46.94 28.41 25.85 26.16 30.46
Total Outstanding Claim (Rs. ‘crores’) 80.93 84.13 40.37 81.31 68.45
Net Profit  (Rs. ‘crores’) 23.24 10.39 16.48 9.16 8.76
Earnings Per Share (Rs.) 43.95 20.76 25.01 18.32 27.35#
Networth Per Share (Rs.) 272.14 200.64 187.4 201.52 278.21#

Note 1: The data is based on the unaudited second-quarter report of the fiscal year 2076/77. After the audit, the numbers may vary.

Note 2: NLG Insurance has already closed the shareholders’ registration book for the issue of 1:0.6 or 60% right share. After the right issue, the capital will increase to Rs. 102.46. Likewise, the per-share earnings and per share network will vary accordingly.

Investors are advised to take these things into consideration while making the investment decision. This material is just the guideline which the investors can use while considering all other factors that might impact their investment.

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