Insurance premium collection crosses Rs100b for first timeInsurance premium collection by Nepal’s life and non-life insurance companies has crossed the Rs100 billion mark for the first time, the Insurance Board (IB) said. Life insurance accounts for 87 percent of the premiums.
Insurance premium collection by Nepal’s life and non-life insurance companies has crossed the Rs100 billion mark for the first time, the Insurance Board (IB) said. Life insurance accounts for 87 percent of the premiums.
Speaking at a programme on Friday, IB Chairman Fatta Bahadur KC said the insurance market had been expanding at the rate of 15 percent annually. “However, it still has not reached large sections of the population mainly in rural areas,” he added.
The IB said house insurance had surged in the wake of last year’s devastating earthquake as terrified homeowners rushed to secure their properties. However, the full potential of this segment has not been realised due to the Indian embargo.
Despite a flood of inquiries about house insurance, they have not been converted into sales, insurers said. They added that customers who had bought partial insurance coverage had been asking for full coverage as they had not been able to get compensation for houses that were totally destroyed by the tremor.
According to insurers, the tendency of buying insurance up to the amount of the home loan had changed to full risk coverage after the disaster.
Meanwhile, non-life insurance sectors like farm insurance, micro insurance and health insurance had not grown as expected, according to the IB. The board had launched farm insurance some four years ago in a bid to spread the concept of insurance among a greater number of people.
The government has even hiked premium subsidies from 50 percent to 75 percent to encourage people to buy insurance. However, crop insurance has not spread as expected. As per the board, insurance companies collected Rs130 million in premiums from the farm sector.
Livestock insurance accounted for 85 percent of the premiums. “Crop insurance accounted for 7-8 percent and fisheries accounted for the rest,” KC said.
KC added that the government was considering waiving VAT on premiums from the next fiscal year in a bid to promote farm insurance.
He has asked for more incentives from the government to promote micro and health insurance.
With regard to claims settlement, non-life insurers had settled 59 percent of the total claims related to earthquake damage as of April 21.
According to the board, insurance companies paid out Rs10.86 billion for 11,384 claims out of the total claims amounting to Rs18.4 billion for 12,775 claims.