Insurance coverage reaches 18 percent of total population

Published On: May 28, 2019 05:00 AM NPT By: Republica | @RepublicaNepal

KATHMANDU, May 28: Insurance coverage has reached 18 percent of the total population of the country.

According to the Economic Survey of FY 2018/19 released by the Ministry of Finance on Monday, 18 percent of the total population has access to insurance services as of mid-March. Such coverage is projected to grow to 20 percent in the current fiscal year, according to the survey.

The survey attributes the proliferation of insurance companies and their presence to the growth in insurance coverage. There are 19 life insurance companies and 20 non-life insurance companies in the country. Similarly, there is one reinsurance company in operation.

The Beema Samiti -- the insurance sector regulator -- has also directed insurance companies to open their branch offices and expand their services across the country as per the new federal set up. Last year, the Beema Samiti had issued license to nearly a dozen new insurance companies, prompting insurers to expand their coverage to find businesses amid stiff competition in the market.

Insurance companies have altogether 2,009 offices across the country. While life insurance companies have 1,290 offices, there are 719 offices of non-life insurers as of mid-March.

Investment fund of the insurance industry also increased to Rs 258.83 billion over the first eight months of FY2018/19, up from Rs 229.54 billion in FY2017/18.

The gross financial resource and utilization of insurance business has increased to Rs 313.89 billion in eight months of the current fiscal year, up by 30.5 percent in the corresponding period of the last fiscal year. Similarly, premium earning of insurance companies is also rising gradually. According to the survey, insurance companies collected Rs 77.88 billion in premium in the first eight months of the current fiscal year, compared to Rs 30.43 billion three years ago. Premium earning in the review period equals to 2.6 percent of the country's GDP.

According to observers, the government's scheme on agro and livestock insurance has also helped to drive up insurance coverage. As more farmers are participating in government-subsidized insurance schemes, it has also helped to lift the coverage.

The data shows that government provided a total of Rs 430 million in subsidies to farmers for the coverage of their agro and lives stock products worth Rs 1.32 trillion.

Under this scheme, the government offers 75 percent subsidy on insurance premium for certain agro products and livestock.