Submit your Article

With the country grappling with the economic slowdown, the insurance business has taken a beating in the current fiscal year. Both life and non-life insurance business grew in single digits in the first half of the current fiscal year 2022/23. After growing in double digits in previous years, the insurance business (life and non-life) grew by a meager two percent in the first six months of the current fiscal year compared to a growth of 15 percent in the same period of the last fiscal year. The statistics of the Nepal Insurance Authority (NIA) show life and non-life companies collected insurance premiums totaling Rs 91.73 billion in the first half of FY 2022/23 which was Rs 90.12 billion in the corresponding period of the last fiscal year. Similarly, insurance premiums increased by only Rs 1.72 billion in this fiscal year. According to NIA, life insurance companies collected premiums amounting to Rs 71.65 billion in the first six months of the current fiscal year, while it was Rs 20.08 billion for non-life insurance companies. The premium collection of life insurance companies during the same period of the last fiscal stood at Rs 70.91 billion and non-life insurance companies at Rs 19.09 billion. According to NIA Executive Director Raju Raman Poudel, the ongoing economic slowdown has affected the insurance business. "Insurance business is facing challenges due to the high-interest rates, liquidity crunch, and rising inflation. These factors have reduced the common people's purchasing power," he said. Manoj Kumar Lal Karna, CEO of Union Life Insurance, is of the view that the growth of the insurance business has been held back in the current fiscal year due to the economic slowdown. "Currently, we are seeing surrender of life insurance policies in large numbers," he said. According to Karna, insurance premiums of large amounts are generally paid by borrowing money from banks. As banks are struggling with a liquidity crunch, borrowing from them has become difficult in this fiscal year and customers have not been able to pay the premiums. "As a result, there has been a big decline in the growth rate of the insurance business," he said. Insurers say that the rise in the non-renewal and surrendering of insurance policies is dragging the business down. The trend of surrendering the policy before the maturity period is increasing, according to insurance companies. The NIA data shows insurers have surrendered Rs 6.08 billion during this period. 43,715 insurance policies were surrendered in the last six months. Insurance Premium Collection

The Securities Board of Nepal (Sebon) is going to make a new arrangement to allow stock brokerage companies to open branches within 15 days of the application. The stock market regulator is preparing to introduce a new policy by revoking the existing provisions related to the operation of the branch office of the brokerage firms. Sebon is in the process to grant permits to open branches within 15 days of receiving the application. Till now, there is no limit to granting permission for opening branches as the existing rules give discretionary power to Sebon to issue permits. As a result, the applications used to be pending for months and years at the board. According to Sebon Chairman Ramesh Hamal, a policy will be made to grant permission within 15 days of receiving the application for the branch opening. "Now brokerage companies don't have to wait for months and years to get permission to open branches like in the past. We have initiated a process to grant such permission within a short period," said Hamal, adding, "The process is in the final stage." According to Sebon, the branch opening process is being simplified to expand the share trading geographically. In his tenure, Hamal has already issued permits to 10 companies to open 16 branches last year. According to the board, the new provision will encourage brokerage companies to expand their branches to new places which will further expand the capital market in the country. In the current fiscal year, seven branches of four brokerage companies have come into operation outside the Kathmandu valley. The board had permitted the operation of branch offices outside the valley in all seven provinces of the country. As of now, 41 brokerage companies have opened 47 branches outside Kathmandu valley. About two years ago, brokerage companies applied to the board seeking permission to expand branches in about 200 locations in all seven provinces. However, the board has issued permits to only 10 brokerage firms to expand branches in 23 places. "Brokerage firms that have received in-principle approval for branch expansion were given time to prepare the infrastructure and most of the companies have already prepared the infrastructure," said Hamal. As per the third amendment of the Securities Businesspersons (Stock Broker, Securities Dealer and Market Maker) 2020, brokerage firms must ready all their infrastructure before receiving the final approval for branch office operations.  

The price of gold has dropped by Rs 1, 300 per tola in the domestic market on Friday. According to the Federation of Nepal Gold and Silver Dealers’ Association, the yellow bullion is being traded at Rs 103, 600 per tola today. The yellow metal was traded at Rs 104, 900 per tola on Thursday. Meanwhile, tejabi gold is being traded at Rs 103, 100 per tola. It was traded at Rs 104, 400 per tola. Similarly, the price of silver has dropped by Rs 30 and is being traded at Rs 1,290 per tola today.

The Nepal Stock Exchange (NEPSE) gained 12.45 points to close at 2,182.63 points on Thursday. Similarly, the sensitive index surged by 1.42 points to close at 415. 42 points. A total of 5,648,212 unit shares of 257 companies were traded for Rs 2. 06 billion. Meanwhile, Barahi Hydropower Company Limited was the top gainer today, with its price surging by 10. 00 percent. At the end of the day, total market capitalization stood at Rs 3. 14 trillion.