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By Dipesh Ghimire

Analysis of Nepal’s Life Insurance Sector Growth in the First Half of FY 2082/083

Analysis of Nepal’s Life Insurance Sector Growth in the First Half of FY 2082/083

The first half of the fiscal year 2082/083 has proven to be an incredibly successful period for Nepal's life insurance sector. According to Nepal Insurance Authority, life insurance companies have recorded a substantial business turnover of over NPR 24 billion. By the end of the month of Poush, these companies collectively generated a total premium income of NPR 24.3 billion, marking a significant rise in the country’s insurance market.

Shikhar Insurance Leads the Market

Among the top players in the life insurance market, Shikhar Insurance has emerged as the leading company, with a business turnover of NPR 2.77 billion. This figure solidifies Shikhar’s position as the dominant player in the sector. Following closely behind is Sagarmatha Lumbini Insurance Company (SLICO), which earned NPR 2.61 billion in premium income. These two companies are the trailblazers of the industry, driving the sector forward and setting the bar for others to follow.

Himalayan Everest and Siddhartha Premier Insurance Companies Show Strong Growth

Himalayan Everest Insurance has also shown strong performance, securing the third position in the market with a premium income of NPR 2.49 billion. Siddhartha Premier Insurance ranked fourth with a premium collection of NPR 2.19 billion. These companies are reflecting a positive trend in premium collection, contributing to the overall growth of the sector in the country.

The Role of Large vs. Small Companies in the Market

The sector has also witnessed a stark contrast in performance between large and small companies. While the large insurance firms have collectively amassed a total of NPR 23.67 billion, small insurance companies have earned significantly less, with a total premium collection of only NPR 627 million.

Notably, the large companies issued 1.4 million policies during this period, with United Ajod Insurance leading the charge. This highlights the dominance of large-scale insurance companies in terms of both business volume and the number of policies issued.

Small Companies Demonstrate Solid Growth Despite Limited Resources

On the other hand, the small insurance companies have also made their mark, issuing a total of 230,493 policies during the period. While their total premium income remains low compared to larger firms, they have demonstrated considerable potential in expanding their client base and contributing to market growth. Protective Micro Insurance emerged as the leader in this category, issuing 66,256 policies. Other small companies like Nepal Micro, Trust Micro, and Star Micro also recorded noteworthy sales figures.

Policy Distribution: United Ajod Takes the Lead

The number of policies issued by the insurance companies also presents a picture of market dynamics. United Ajod Insurance stands out as the top performer in policy issuance, with over 200,000 policies issued. The company issued 207,530 policies, more than any other firm in the sector. This is followed by Himalayan Everest Insurance, which issued 160,931 policies, and Shikhar Insurance, which issued 157,609 policies.

The top-performing companies in policy issuance reflect the industry’s growing focus on reaching new customers and expanding their services. The increase in the number of policies issued is a clear indicator of a growing awareness of insurance products among the Nepali population.

Future Outlook: A Positive Growth Trajectory

Looking ahead, the life insurance sector in Nepal appears to be on a positive growth trajectory. Both large and small companies have shown considerable resilience and growth, driven by expanding customer bases and a variety of insurance products suited to the needs of the population. The ongoing trend of policy issuance and premium growth suggests that the sector is becoming an increasingly important part of Nepal’s financial landscape.

However, the market still faces challenges, particularly for small companies that continue to operate with limited resources. For these companies to thrive, they will need to invest in expanding their outreach, improving customer service, and enhancing product offerings. Additionally, large companies need to maintain their competitive edge by innovating and offering more attractive policies to their clients.

Conclusion:

The life insurance sector in Nepal has shown remarkable progress in the first half of FY 2082/083. With leading companies like Shikhar Insurance and Sagarmatha Lumbini Insurance paving the way, the sector continues to grow, with both large and small companies contributing to this upward trend. The increasing number of policies issued and the growing premium income are clear signs of a thriving industry. As the sector progresses, there is much to be optimistic about for the future of insurance in Nepal.

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