Life insurance companies spent more than 5.5 Billion Rupees on agent commission, although half of the Companies’ commission was reduced 

Kathmandu : Life insurance companies have released their financial statements for the second quarter of the current fiscal year 2080/81 B.S (2023 A.D). The life insurance companies currently under management have spent 5 billion 883 million 258 thousand Rupees on agent commission in 6 months of the current financial year.

In the same period of the last fiscal year (2079/80 B.S), the company spent 5 billion 818 million 200 thousand Rupees on agent commission. Compared to the last fiscal year, the agent commission of the company has increased by 1.12 percent.

Although the agent commission has generally increased, the commission of 8 companies has decreased. Om Bahadur KC, senior agency manager of Nepal Life, said that due to the complicated examination system of the Nepal Insurance Authority and the economic recession, the agent’s commission has decreased recently. He said, “One agent’s commission expenses from each company have decreased. In addition to this, due to the fact that the online examination system taken by the insurance authority has become more complicated, such problems have occurred due to the migration of agents too.”

Kc’s argument was that the old agents did not renew their licenses again because the commission expenses were reduced. “The old agents do not seem to have renewed their license. Old agents are not accepting the system of having to give an exam while renewing the license. This is also the reason why the agent commission is decreasing,” KC said.

How much did Life Insurance companies spend on agent commission in this quarter?

As of this quarter (end of Paush, 2080 B.S), Nepal Life, which has the highest turnover among life insurance companies, is ahead. The company has spent 1.49 billion Rupees on agent commissions during this quarter.

National Life Insurance Company is in second position. The company has spent 767.4 million Rupees on agent commission during this quarter.

The third is Life Insurance Corporation (Nepal). The company has spent 660.9 million Rupees on agent commission during this period.

According to the data published by the companies, the money spent on agents commission are as follows:

Himalayan Life’s Rs 656.3 million, Suryajyoti Life’s Rs 378.5 million, Asian Life’s Rs 322.1 million, Sanima Reliance’s Rs 287.9 million, Citizen Life’s Rs 275.5 million and Met Life’s Rs 239.3 million.

Similarly, Prabhu Mahalaxmi has spent Rs 230.8 million, Reliable Nepal Rs 218.6 million, IME Life has spent Rs 204.4 million and Sun Nepal Life has spent Rs 149 million on agent commission.

Agent commission of 8 companies decreased

Based on the financial statements until the second quarter, the agent commission of 8 companies has decreased. By this period, Citizen Life’s agent commission has decreased by 19.61 percent compared to the previous fiscal year. The company spent Rs 342.7 million on agent commission in the last financial year and has reached Rs.275.5 million in the current fiscal year in the same period of time.

Similarly, the agent commission of Reliable Nepal decreased by 11.87 percent to 218.6 million Rupees, Sun Nepal Life decreased by 9.80 percent to 149 million rupees and IME Life decreased by 9.01 percent to 204.4 million rupees.

Similarly, Asian Life decreased by 8.45 percent to Rs 322.1 million, Himalayan Life decreased by 8.03 percent to Rs.656.3 million, LIC Nepal decreased by 7.16 percent to Rs.660.9 million and Nepal Life decreased by 2.98 percent to 1 billion 492.2 million Rupees which has been spent on agent commission.

How much did the other five increase by?

Out of the currently operating life insurance companies, only five companies have seen an increase in agent commission. Sanima Reliance is among the companies that increase the agent commission the most. The agent commission of the company increased by 97.05 percent and became 287.9 million Rupees.

Similarly, agent commission increased by 56.93 percent of  Prabhu Mahalaxmi Life, 46.86 percent of Suryajyoti Life, 3.79 percent of National Life and 3.29 percent of Met Life.