Life Insurance Companies Pay Nearly Rs 49 Billion in Claims, But Arrears Nearly Double

Kathmandu – Life insurance companies operating in Nepal have paid insurance claims totaling nearly Rs 49 billion by the end of Baisakh (mid-May) month in the current fiscal year, according to the Insurance Authority of Nepal. The cumulative amount paid by 14 life insurers stands at Rs 48.95 billion, disbursed against 218,951 claims filed by policyholders.

This marks a 3.38 percent decline in claim payments compared to the corresponding period of the previous fiscal year, when insurance companies had settled claims amounting to Rs 50.66 billion for 248,999 policies.

The process of settling life insurance claims typically requires documentation such as police reports, verification of fraud references, and the submission of necessary details by the legal guardians of the insured. Once these procedural requirements are fulfilled, companies generally facilitate prompt claim settlements.

However, despite the substantial volume of disbursed claims, life insurers are currently facing a significant backlog in pending payments. By the end of Baisakh, outstanding claims had surged to Rs 4.45 billion—an increase of 95.42 percent compared to the Rs 2.27 billion in arrears recorded during the same period last fiscal year.

Insurance experts have attributed the rising arrears to two primary factors: procedural delays on the part of insurers and incomplete or late documentation from claimants or their guardians. They emphasize that a coordinated approach involving insurance agents, beneficiaries, and company representatives can help expedite the settlement process.