The unaudited balance sheets of 13 non-life insurers show the number of unsettled claims topping 16,250, up 11.88 percent, in the first quarter of 2012/13. These claims were worth Rs 3.28 billion as against Rs 2.01 billion recorded in the same period last fiscal year, show the balance sheets of non-life insurers, excluding state-owned Rastriya Beema Sansthan, Shikhar Insurance, NB Insurance and National Insurance that are yet to publish their first quarter financial statements.[break]
“This is definitely an upsetting development. We are summoning insurance companies and asking them to furnish explanation on their inability to reduce the number of unsettled claims,” Insurance Board Chairman Dr Fatta Bahadur KC told Republica.
In May, the Insurance Board, the insurance sector regulator, instructed all non-life insurance companies to reduce the number of unsettled claims by 50 percent within six months, after finding a heap of such liabilities at those firms. At that time, non-life insurance companies had hoarded 20,761 unsettled claims valued at Rs 2.57 billion.
The startling figures that came out at that time were viewed by the regulator as inability of non-life insurance companies to shore up policyholders, who were regularly paying the premium amount in hope of being rescued at times of trouble.
Equating it with social crime, Insurance Board Executive Director Binod Aryal at that time had told Republica that the practice of failing to honor genuine claims filed by clients “will not be tolerated anymore”.
As the regulator launched the drive against insurers that unnecessarily delayed claim settlement process, the companies made some improvement, and till the end of the last fiscal year ended July 15, the number of unsettled claims came down by over 30 percent. But considering the figures of first quarter of this fiscal year it gives an indication that non-life insurers´ indifferent attitude toward policyholders has not changed.
The unaudited balance sheets of non-life insurance companies indicate Himalayan General Insurance as the most notorious insurer in terms of settling claims, with 4,793 unsettled claims worth Rs 264.19 million piled up to its credit till the end of first quarter to mid-October. The figures, in terms of number and amount, mark hikes of 551 as and 40.07 percent, respectively, than in the last quarter of last fiscal year.
The next in the league table of notorious claim settlers is Everest Insurance, which stashed 2,658 of unsettled claims valued at Rs 524.53 million till the end of first quarter of the current fiscal year. The company held 1,497 unsettled claims worth Rs 189.09 million as of first quarter of last fiscal year and 2,475 of unsettled claims valued at Rs 406.16 million in the fourth quarter of last fiscal year.
On the heels of Everest is Sagarmatha Insurance, with 1,495 unsettled claims worth Rs 261.53 million credited to its name. Although unsettled claims at Sagarmatha are at higher end, the insurer had actually reduced the quantity by over nine percent in comparison to figures of the first and fourth quarters of last fiscal year.
Other better performers in terms of reducing the number of unsettled claims include The Oriental Insurance, which now holds only 171 unsettled claims, down from 714 and 446 recorded in the first and fourth quarter of last fiscal year. Although the number of unsettled claims at The Oriental is the lowest in the non-life insurance industry, these miniscule quantity of claims are valued at a whopping Rs 379.51 million, which is third highest after United Insurance´s Rs 795.66 million worth of unsettled claims and Everest´s Rs 524.53 million.
“The general trend of reducing the quantity of unsettled claims while keeping volume of unsettled claim amount at a higher level is disturbing. We will think of ways to address the problem,” Dr KC said.
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