Insurance Penetration in Nepal Exceeds 51%, Market Fund Surpasses 1 Trillion Rupees

Kathmandu. Nepal Insurance Authority has stated that the country's insurance penetration has exceeded 51 percent and the overall insurance market fund has reached over 1 trillion rupees. Executive Director Sushil Dev Subedi of Nepal Insurance Authority stated this in the meeting of the Finance Committee under the House of Representatives on Tuesday. According to Executive Director Subedi, currently 37 insurance companies are in operation in Nepal, including 14 life insurance, 14 non-life insurance, 7 micro-insurance, and 2 reinsurance companies. As of the end of Jestha, a total of 223 billion rupees in insurance premiums have been collected, while more than 66 billion rupees in claims have been paid. The contribution of the insurance sector to Nepal's Gross Domestic Product (GDP) has reached 3.69 percent, which is higher than the world average of 3.50 percent. The sector has provided direct 'white collar jobs' to 13,000 people and employment to more than 400,000 agents and over 1,200 surveyors, the authority stated. Currently, 16.7 million insurance policies are active. During the fiscal year 2082/83, the authority has intensified its regulatory work. During this period, 18 insurance companies have been cautioned and fined, while the license of one reinsurance broker and the business of one reinsurance company have been temporarily halted. The authority has completed 79 on-site inspections and settled 276 complaints, which is a significant increase compared to the previous year. To systematize the insurance sector, the authority has implemented more than 4 dozen directives and guidelines. This year, directives related to agents, surveyors, Anti-Money Laundering (AML), and risk-based capital have been revised and issued. Additionally, special attention has been given to the Anti-Money Laundering directive to save Nepal from the 'grey-list', stated Executive Director Subedi. To increase insurance literacy, insurance subjects have been included in the curriculum for grades 5, 8, 10, and 12. In the field of technology, the authority has implemented 'paperless' decision-making processes, digital signatures, and online examination systems. The 'Alice' software has been launched to systematize agricultural insurance, and preparations are in the final stages to send police reports directly to insurance companies through a digital system. The authority is studying hydropower insurance, the establishment of an insurance information center, and the reasons for the lapse of life insurance policies. Subedi expressed confidence that the establishment of an insurance information center will control fraud and criminal activities in this sector. While admitting some delay in the financial statements and audits of government-owned National Life Insurance Company, National Insurance Company (Non-life), and Nepal Reinsurance Company, the authority has given strict instructions for improvement. Subedi informed that these companies have been urged to increase capital, reconcile accounts, and hold general meetings on time. In the meeting, Subedi also drew the committee's attention to removing the contradictions between the Insurance Act and other prevailing laws and implementing the provision of amending the act every five years.