Contraction seen in Insurance Business, Even Reduction in numbers of Offices and Staffs

Kathmandu : With the recession seen in the country’s economy, the business growth of the insurance companies operating is also shrinking now-a-days. Due to the effects of the economy, like other sectors, the business of the insurance company has been slowly shrinking recently. Because of this, the number of offices and the number of employees of the insurance company has also started to decrease. Insurance experts are sharing their opinion that it is natural for the number of offices and employees to decrease with the impact recession on the insurance business.

There has been seen decline in the number of life insurance policies and the collection of insurance fees by non-life insurance companies. Although there is a general increase in the premium fee earning rate of the companies whereas there is a contraction in the growth of the overall business.

Life and non-life insurance companies have collected a total of 124 billion 859 million 95 thousand Rupees premium fee till the end of Falgun month of the fiscal year 2080/81.

14 non-life insurance and 14 life insurance companies, together has collected the Insurance premium amount which is 4.40 percent higher than the same period of the previous fiscal year. As, until the same period of the previous fiscal year, the company had collected 119 billion 598 million 612 thousand Rupees as premium fees. Whereas during this current period, the business of non-life insurance has shrunk, even more compared to life insurance. Till the end of Falgun month, of the current fiscal year, life insurance premium fee collection has increased by 5.19 percent, while the growth rate of non-life insurance premium fee collection has been limited to only 1.53 percent.

Experts say that since the economy has not been running in recent times, the insurance sector has not been actively working. Since the country’s economy is not functioning, it is seriously affecting the daily life of the general public, the government as well as private sector.

Insurance expert Dr. Ravindra Ghimire said that the state of recession seen in the economy is also seen in the insurance sector as well.  He said, “People’s purchasing power is shrinking. The business of the insurance sector is also gradually declining.”

According to the Nepal Insurance Authority, 14 life insurance companies operating in the country have collected 98 billion 590 million 600 thousand Rupees till the end of Falgun month of this year (2080 B.S). Which is 5.19 percent more than the same period of the previous year as the life insurance companies’ insurance fee collection was 93 billion 725 million 200 thousand Rupees in the same period of previous year.

Similarly, 14 non-life insurance companies have collected 26 billion 268 million 434 thousand Rupees, which is 1.53 percent more than the same period of the previous year as the insurance fee collection of the non-life insurance company was 25 billion 873 million 360 thousand Rupees in the previous year.

Meanwhile, the number of insurance articles issued by the non-life insurance company has increased by 4.42 percent until the end of Falgun month of the current year. On the other hand, the number of insurance articles issued by life insurance companies has decreased by 1.39 percent in comparison with same period of last fiscal year.

Similarly, the life insurance companies have issued 13 million 807 thousand 249 insurance articles till the end of Falgun month of the current fiscal year, which has been decreased by 1.39 percent compared to the same period last year as those companies had issued 14 million 1 thousand 577 insurance articles in the previous year.

By the end of Falgun month of the current year, 43.16 percent of the total insurance policies is covered by long-term, short-term and foreign employment life insurance policies. This number has decreased compared to the same period last year.

During the review period, there has been an increase in the number of foreign employment insurance policies. By the end of Falgun month of the current year (2080 B.S), 2 million 9 thousand 351 foreign employment insurance policies have been issued. Which is 44.15 percent more than the same period of the previous year which was 1 million 393 thousand 956 foreign employment insurance policies.

During the review period, renewal life insurance fee collections has been increased by 6.20 percent. Up to the end of Falgun month of the current fiscal year, the renewal fee of life insurance collection is 79 billion 865 million 552 thousand Rupees which is 6.2 percent less in comparison with last year’s renewal fee collection as it was 75 billion 200 million 779 thousand Rupees.

Likewise, the number of offices of insurance companies has decreased by 8.80 percent as the number of offices of insurance companies which was 3,215 branch offices last year has decreased to 2,932 this year.

Similarly, based on the analysis, the number of employees of life insurance companies has decreased by 1.87 percent as they had 5933 employees in last year which has decreased to 5822 employee s this year.

Whereas, the number of employees in non-life insurance is seen to have increased. Last year there were 5,591 employees in the company which has increased by 58 percent and become 5,773 employees this year.

But, if we count, total number of employees of both non-life and life insurance companies then there has been a general improvement. Last year the number of employees in the companies was 11524 which has slightly increased and become 11,555 employees this year.