KATHMANDU, May 24: As the government is likely to raise the budget for the agriculture and health sectors significantly due to the ongoing threat of Covid19, non-life insurers of late have been eyeing these two sectors to expand their business.
There is a growing call for boosting the farm products business to address the heavy fall in employment opportunities resulting from the ongoing nationwide lockdown that is in effect since March 24. Similarly, the mayhem created by the existing poor infrastructure in medical treatment is another major concern that has been pressing the government to allocate enough funds for the health sector.
Recently, the parliamentary Finance Committee has also advised the government to allocate at least 15 percent of the total budget, which could amount to over Rs 100 billion, for agricultural production. Similarly, the oversight agency of the Federal Parliament has also recommended to the government to manage 10 percent of the budget to spend on the construction of health infrastructure at the local level. This includes a medical insurance coverage of Rs 3.5 million for each of the health workers deployed to serve the corona patients.
According to the Insurance Board, there is a significant rise in policy selling in medical insurance including the ones related to COVID-19. As of Thursday, the non-life insurers have insured 160,000 individuals against the disease since the regulator allowed them to sell policies in the segment on April 16. The premium collection out of selling the policies stood at Rs 86.1 million.
Anjan Dhakal, chief of Corporate and International Business at NLG Insurance, said they have started focusing on the insurance of Covid-19 by charging a minimum amount of premium. “Apart from the individuals, employers have also expressed much concerns to insure their staff,” said Dhakal.
Of late, Nepal is also facing an increasing threat of coronavirus with around 600 individuals being infected by the virus. According to Raju Raman Poudel, executive director of the Insurance Board, the decision by the board to allow the insurers to conduct their business online has helped increase the insurance business in the segment. He said the board has allowed insurers to insure the returning migrant workers only on the back of conducting the health checkup, to minimize the risk to the insurance companies.
According to the board, the individuals can receive a coverage of Rs 100,000 against a premium payment of Rs 1,000 while those willing to purchase a policy of Rs 50,000 have to pay a premium of Rs 500.
A senior official of Sagarmatha Insurance said the insurers are now focusing more on Covid-19 after they were unable to sell new business policies.
The situation is also likely to expand the insurance of farm products which has been going through a slow pace in the country. The board has enforced over two dozen distinct insurance policies to cover major livestock and crops produced in the country such as ginger, coffee, paddy, mushroom, potato, sugarcane, seed, vegetable, turmeric, cardamom, banana, cattle, fish, poultry and goat. With an exception of a few cash crops and livestock, there is only nominal increase in the insurance of farm products since the government implemented the provision in 2013.
Dhakal of NLG Insurance said the insurers are likely to face notable claims in farm business due to the loss incurred during the lockdown. “However, we have targeted to expand our business more in agricultural products in the coming days,” he said.