The consolidation in the insurance sector has brought down the number of insurance companies; the number of non-life insurance companies has declined to 15 from earlier 20, while the number of life insurance companies came down to 15 from 19.
Prime Life, Union Life, and Gurans Life signed a final merger agreement to form Himalayan Life Insurance Company Limited in the second week of January on a swap ratio of 1:1:1. The paid-up capital of Himalayan Life Insurance has reached Rs 7.69 billion. Sulav Agrawal has been named as the chairman of the new entity formed after the merger and Manoj Lal Karn has taken charge of the company as the CEO. The IME General and Prudential Insurance have agreed to merge on an equal basis of a 1:1 swap ratio. Hem Raj Dhakal and Yugesh Bhakta Bade Shrestha have been named as chairman and CEO of IGI Prudential Insurance, respectively. Among the insurance companies having inked merger MoUs, only Ajod Insurance and United Insurance have yet to begin their integrated business. They are planning for integrated business by the first week of June. With NIA pushing for a consolidation drive by raising the minimum paid-up capital requirements for both life and non-life insurers, insurance companies have ratcheted their merger initiatives. The regulator has increased the paid-up capital of non-life insurance companies to Rs 2 billion while it is Rs 5 billion for life insurance companies. "The merger drive will bring a synergetic effect in the insurance sector," said Shamba Raj Lamichchhane, Deputy Director at NIA. "We have set the mid-July deadline for insurance companies to increase their paid-up capital. While those completing mergers will get some flexibility to increase their capital, others will have to increase their capital within the deadline."
