Nepal Life Insurance Q4: Strong Revenue Growth, Stable Profitability Despite Rising Claims

Nepal Life Insurance Company Limited (NLIC), the largest life insurer in Nepal, has reported its audited Q4 results for FY 2024/25, showcasing strong revenue growth and expanding market reach, although profit margins remain tight under the pressure of rising claims and policy obligations.

The company posted a total revenue of Rs. 68.37 billion in Q4, marking a 25.80% year-on-year increase from Rs. 59.24 billion in the same period last year. Revenue growth remained consistent across the fiscal year, with sequential gains of 7.08% in Q3 and 14.46% in Q2, underscoring NLIC’s ability to sustain premium expansion.

Gross profit reached Rs. 7.02 billion, translating into a gross margin of 10.27%, slightly below last year’s 10.62%. The moderation in margins suggests increased expenses and claim payouts despite higher premium inflows.

Net income came in at Rs. 603.26 million, up from Rs. 513.98 million in Q4 of FY 2023/24, representing a modest 17.4% YoY growth. However, the net margin remained low at 0.88%, reflecting persistent profitability pressure in the insurance sector.

Key return metrics stayed steady. Return on Assets (ROA) was 0.26%, nearly unchanged from last year, while Return on Equity (ROE) stood at 5.14%, slightly up from 4.64% a year earlier. Earnings per share (EPS, annualized) stood at Rs. 6.68, lower than Rs. 9.63 in Q3 and Rs. 11.41 in Q2, reflecting quarterly fluctuations. The PE ratio was 115.69, indicating high market valuation relative to earnings.

The company’s book value per share rose to Rs. 136.75, while the market value surged to Rs. 772.97, compared to Rs. 619.00 last year, signaling continued investor confidence. Dividend for FY 2024/25 is pending; last year NLIC distributed Rs. 21.05 per share.

Insurance Business Highlights

• Total enforced policies surged to 2.29 million (+55.95% YoY), reflecting aggressive expansion in coverage.

• First-year premiums jumped to Rs. 10.98 billion (+36.89% YoY), supported by strong new policy acquisition.

• Single premiums more than doubled to Rs. 4.61 billion (+111.62% YoY).

• Renewal premiums climbed to Rs. 37.22 billion (+13.38% YoY), showing strong customer retention.

• Claims paid dropped to 57,879 (-25.29% YoY), easing payout pressure.

• Outstanding claims rose to 18,988 (+9.35% YoY), suggesting pending obligations remain high.

• Long-term investments increased significantly to Rs. 206.91 billion, compared to Rs. 191.28 billion last year, strengthening future income streams.

• Short-term investments also surged to Rs. 33.39 billion, more than double last year’s Rs. 14.48 billion, enhancing liquidity.