Reliable Nepal Life Insurance Limited (RNLI) Q4 2024/25 Financial Review: Analyzing Performance Amid Strong Premium Growth and Policy Decline

Total Revenue

RNLI reported a 22.99% increase in total revenue for Q4 2024/25, reaching Rs. 6,513,517.04 thousand, compared to Rs. 5,283,325.21 thousand in Q4 of the previous year. This growth reflects a positive upward trend in the company’s revenue generation, despite a slightly reduced revenue growth from Q3 to Q4. The year-on-year increase indicates that RNLI has managed to adapt to market conditions and sustain solid revenue performance over the past year.

Gross Profit

The gross profit for Q4 2024/25 was Rs. 1,093,685.84 thousand, a substantial improvement compared to Rs. 1,079,938.51 thousand in Q4 2023/24. The gross margin for the quarter stands at 16.79%, a slight decrease from 20.44% in the previous year. This margin drop reflects rising costs, but RNLI has still maintained a strong profitability position despite the challenges in the market.

Net Income

RNLI achieved a net income of Rs. 570,195.96 thousand in Q4 2024/25, which marks a significant increase from Rs. 426,358.24 thousand in Q4 2023/24. The net margin increased to 8.75% compared to 8.07% in the previous year, reflecting better overall cost management and a more efficient operation. The growth in net income highlights the company’s ability to capitalize on its premium income and overall revenue.

Return on Assets (ROA) and Return on Equity (ROE)

The Return on Assets (ROA) for Q4 2024/25 stands at 2.86%, an increase from 2.72% in Q4 2023/24, signaling better efficiency in utilizing assets to generate returns. The Return on Equity (ROE) increased slightly to 7.48% from 6.49% in the same period last year, reflecting improved returns for shareholders.

Earnings Per Share (EPS) and Price-to-Earnings (P/E) Ratio

The Earnings Per Share (EPS) for Q4 2024/25 decreased to 10.97 from 13.38 in the previous year. Despite this, the Price-to-Earnings (P/E) ratio remains high at 43.44, slightly lower than 49.84 in Q4 2023/24. The high P/E ratio suggests that investors are willing to pay a premium for the company’s stock, likely due to strong growth prospects, even though earnings growth has been slightly slower.

Book Value and Market Value per Share

The book value per share stood at Rs. 147.47 in Q4 2024/25, compared to Rs. 158.84 in Q4 2023/24, showing a slight decrease in the company’s net worth per share. However, the market value per share increased to Rs. 476.68, from Rs. 458.00 in the same period last year, indicating investor confidence in the company's future growth potential despite the reduction in book value.

Non-Life Insurance Performance

In the non-life insurance sector, the total number of enforced policies dropped by 11.98%, with 2,494,819 policies in Q4, down from 2,834,369 policies in Q4 2023/24. This decline suggests that RNLI faces challenges in retaining or acquiring new policies, which is reflected in the year-on-year decline in enforced policies. However, First Year Premiums saw an increase of 51.53%, indicating that new customer acquisition is still strong, despite the reduction in policies.

Claims and Outstanding Benefits

The company’s total benefits and claims paid increased by 6.78% to 4,361 in Q4, reflecting higher payout levels. Meanwhile, outstanding benefits and claims increased by 27.78%, showing a rise in liabilities and claims yet to be settled.

Investments

RNLI continues to manage a strong investment portfolio, with long-term investments at Rs. 17,153,143.81 thousandin Q4, reflecting a stable asset base. The company also increased its short-term investments to Rs. 2,913,500.00 thousand, which signals better liquidity management and the ability to meet short-term obligations.