IGI Prudential Faces Questions Over Bhatbhateni Insurance Claims, Reinsurance Gaps

Kathmandu — Billions of rupees in public investment have been placed at risk as IGI Prudential Insurance Company finds itself embroiled in controversy over its handling of claims related to the recent nationwide protests. Allegations have been raised against Chairman Hemraj Dhakal, CEO Yugesh Bhakta Bade Shrestha, and Reinsurance Chief Priti Baniya for failing to secure adequate reinsurance coverage, which could potentially expose the insurer to significant financial burdens.

During the protests on Bhadra 23 and 24, Bhatbhateni Supermarket suffered extensive damage across its network. Out of 28 branches nationwide, 21 were vandalized, looted, or set on fire. IGI Prudential has received insurance claims for 11 of those branches, with the total estimated damages reaching at least Rs 2.5 billion. However, data submitted by the company to the Insurance Authority reflected only Rs 1.47 billion, raising concerns about inconsistencies and possible concealment.

Industry sources suggest that IGI Prudential will likely bear close to 30 percent of the Bhatbhateni claim burden—more than Rs 700 million—under existing reinsurance treaties. According to the arrangement, around 65 percent of riot and terrorism risks are borne by Nepal Reinsurance Company, while the remaining 30–35 percent are the responsibility of the primary insurer.

With a paid-up capital of Rs 3.29 billion and profits of Rs 364.9 million reported in the last fiscal year, analysts caution that the company may struggle to distribute dividends for the next three years. Questions have also been raised about its risk management practices, particularly its failure to maintain proper reinsurance coverage despite collecting premiums for riot and terrorism risks.

Critics argue that IGI Prudential has violated the principle of risk-based capital by taking on risks far exceeding its capital base. However, Deputy CEO Sharan Regmi defended the company’s position, insisting that sufficient reinsurance arrangements had been made. “There is no problem. We have made full arrangements for reinsurance and have already begun the claim payment process,” he said.