According to NIA, life insurance companies collected premiums amounting to Rs 104.73bn in the first nine months of the current fiscal year, while it was Rs 30bn for non-life insurance companies.
The premium collection of life insurance companies during the same period of the last fiscal stood at Rs 102.54bn and non-life insurance companies at Rs 28.70bn. 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. According to CEOs of insurance companies, 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,” they said. Insurers say that the rise in the non-renewal and surrendering of insurance policies is dragging the business down. “Currently, we are seeing surrender of life insurance policies in large numbers,” said the CEO of a leading insurance company. Among the life insurance companies, Nepal Life Insurance Company (NLIC) has collected the highest premium. The NLIC has collected insurance premiums worth Rs 27.26bn followed by LIC Nepal with Rs 12. 94bn and National Life Insurance with Rs 11.37bn. Similarly, Shikhar Insurance is in the leading position in the non-life sector. The company has collected insurance premiums worth Rs 4.15bn, followed by Sagarmatha Lumbini Insurance with Rs 3.48bn and Siddhartha Premier Insurance with Rs 3.35bn.
