Business of Non-Life Insurance Companies Grows, while that of Life Insurance Companies Declines

There has been a general decline in the business of insurance companies in the first month of the fiscal year 2024/25.

Although there was an overall increase in the business of non-life insurance companies in mid-July to mid-August, the total insurance business was negative due to a decline in the renewal of life insurance policies. According to the Nepal Insurance Authority, non-life and life insurance companies collected a total of Rs 23.59 billion in insurance premiums in the first month of last fiscal year. However, in the corresponding period of the current year, the total insurance premium income decreased by 2.99 percent to Rs 22.88 billion.

Compared to last year, the business of life insurance companies has declined by 5.26 percent. In mid-July to mid-August of last year, life insurance companies earned Rs 19.6 billion from the sale and renewal of insurance policies, but this decreased to Rs 18.57 billion in the current year.

Although first-time insurance premium income for life insurance companies increased, overall insurance premium income was affected due to a decline in renewal of insurance policies.

In mid-July to mid-August of last year, insurance companies collected Rs 2.29 billion in first-time premiums, which increased to Rs 2.39 billion this year. However, premiums from renewal decreased from Rs 17.3 billion to Rs 15.73 billion.

The increase in the number of life insurance policyholders and policy surrenders has affected the business of the companies. In mid-August of 2024, 13.7 million insurance policies were active, whereas in mid-August 2023, the total number of active insurance policies was 14 million.

Meanwhile, the business of non-life insurance companies increased by 8.17 percent in mid-August of the current year compared to the same period last year. According to the Authority, non-life insurance premiums earned were Rs 3.98 billion in mid-July to mid-August last year, which increased to Rs 4.31 billion this year.

Authority spokesperson, Susil Dev Subedi stated that there has been a decline in business growth due to the non-renewal of life insurance policies.

"When comparing the first-time insurance premium collection, the growth of the insurance business is positive," he said. At present, 14 non-life insurance companies, 14 life insurance companies, 3 micro life insurance companies, and 4 micro non-life insurance companies are operating in Nepal.