In the first quarter to mid-October 2011, nine life insurance companies generated revenue of Rs 2.67 billion by either selling new policies or renewing old ones, according to latest statistics provided by the Insurance Board (IB), the insurance sector regulator. This is an increment of 25.6 percent over last fiscal year´s Rs 10.44 billion earned by these companies.[break]
“The earnings of life insurers grew largely because life insurance companies added more agents to their companies to expand businesses,” Rameshwor Shrestha, chief finance officer of Nepal Life Insurance Company, the country´s largest life insurance company in terms of premium collection, told Republica.
His company, which generated revenue of Rs 637.43 million in the first quarter, for instance, added around 4,000 agents to the company this fiscal year alone.
“Most of these agents are working from rural areas from where we are getting largest chunk of customers,” Shrestha said, informing the company generates almost 50 percent of business from rural areas.
Arjun Khadka, assistant manager of National Life Insurance, the country´s third largest life insurance company in terms of premium collection, had earlier told Republica that rural areas in districts like Lamjung, Gorkha, Makwanpur, Jumla and Okhaldhunga have started generating “good business” for insurance companies, as these places consist of families with members employed abroad.
“These families, which have significant chunk of disposable income, have seen or heard of other policyholders getting bonuses at regular intervals and huge chunk of money after the policy matures,” he said, citing these attractions as one of the biggest pulling factors.
The data provided by the IB shows that indemnity policies are still the most favored insurance policy among policyholders. In the first quarter this fiscal year, insurance companies generated income of Rs 1.28 billion by selling new or renewing old indemnity policies.
Of the companies that sold these policies, Nepal Life Insurance topped the list generating a premium of Rs 378.85 million in the first quarter while the state-owned Rastriya Beema Sansthan became second largest seller of these policies accumulating income of Rs 190 million. Likewise, National Life Insurance became the third largest seller of these policies collecting a premium of Rs 187.77 million in the first quarter.
Despite growing awareness about insurance products, less than 1.6 million people have been insured in the country so far, which is around six percent of the country´s total population of 26.62 million.
Top 5 life insurers in terms of premium collection in Q1
1. Nepal Life Insurance - Rs 637.43 million
2. Life Insurance Corporation (Nepal) - Rs 499.62 million
3. National Life Insurance - Rs 428.61 million
4. MetLife Alico - Rs 331.59 million
5. Beema Sansthan - Rs 300 million
Source: Insurance Board
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