July 7: There has been improvement in collection of insurance premium after the easing of the lockdown. The collection of insurance premium and renewal fees had reduced due to the restrictions in movement which was announced on March 24.
In normal times, life insurance companies collect Rs 6 billion in insurance premium monthly. However, during the lockdown, the collection went down to Rs 2-3 billion. According to data provided by the Insurance Board (IB), Rs 4.74 billion was collected from mid-May to mid-June. Insurance companies estimate that the collection for this month with exceed that amount.
There is no exact data about insurance premium collection for this month till now. “Though we are yet to calculate the exact number, the collection has quite increased compared to March, April, May and June,” said Shiva Nath Pandey, president of Nepal Insurers Association. He added that Insurance Sector has been seeing satisfactory growth recently.
The months of April, May, June and July are regarded as the most favorable for insurance business growth. This period is also for renewal of insurance policies. Similarly, the collection of premium is more during mid-June to mid-July as it is the last month the fiscal year. “Insurance agents also need to meet their target to get facilities from the companies. So, this impacts the business,” said Pandey, adding, “Also, there was waiver of fines for delay in paying insurance premium for the last three months.” According to the life insurance companies, there are new policy holders as well. However, the new clients are less in numbers compared to normal times.
Manoj Kumar Lal Karna, CEO of Union Life Insurance says that insurance policy renewal growth is not satisfactory.
“There is an improvement in collection, but it is not up to the mark. Around 25 percent insurance policies will not be renewed this year,” said Karna.
In the last fiscal year, life insurance premium collection had increased by 46 percent. But this time, the growth rate might not that that high.
In the last fiscal year, life insurance companies had collected premium of more than Rs 70 billion. According to Raju Raman Poudyal, executive director of IB said that the premium collection shall increase to Rs 90 billion. According to him, life insurance companies have collected Rs 70 billion till mid-June.