ICRA Nepal Affirms Sagarmatha Lumbini Insurance’s ‘A’ Rating, Removes Negative Watch

Kathmandu — Sagarmatha Lumbini Insurance Company Limited (Salico) has retained its ‘ICRA NP-IR A’ issuer rating after ICRA Nepal reaffirmed the company’s credit profile and removed the ‘Rating Watch with Negative Implications’ status previously assigned to it.

An ‘ICRA NP-IR A’ rating indicates that the insurer has an adequate capacity to meet its financial obligations on time, carries a low credit risk, and maintains a sound overall credit profile. The rating reflects the company’s overall creditworthiness rather than the quality of any specific debt instrument.

According to ICRA Nepal, the decision to remove the negative watch was driven primarily by the insurer’s demonstrated ability to manage claims arising from the major civil unrest that occurred in September 2025. The agency concluded that the company’s liquidity position and capital base were sufficient to absorb the claims without placing undue pressure on its financial stability.

As of mid-April 2026, the company had received riot-related claims totaling approximately Rs. 920 million. Of that amount, Salico’s net retention after reinsurance stood at around 28 percent, or approximately Rs. 261 million. ICRA Nepal noted that the volume of claims remained relatively modest compared with the company’s overall gross premium portfolio.

The rating agency said Salico’s strong reinsurance program, healthy net worth, and adequate liquidity position provide sufficient financial flexibility to settle the claims. However, it also cautioned that the claims are likely to have a noticeable impact on the company’s profitability during FY2025/26.

ICRA Nepal also cited the insurer’s long operating history, sizeable business scale, and established position among Nepal’s leading non-life insurers as key strengths supporting the rating. The company’s satisfactory solvency position and comfortable liquidity profile were identified as additional positive factors.

The agency further highlighted Salico’s ownership structure as a credit strength. Ceylinco Holdings PLC of Sri Lanka remains the company’s strategic institutional promoter and maintains board representation through its affiliated entities, reflecting continued long-term support. ICRA Nepal also acknowledged the insurer’s experienced management team.

Looking ahead, the agency remains optimistic about the company’s prospects, noting Nepal’s relatively low insurance penetration, significant long-term growth potential, and the government’s continued policy support for the insurance sector.

Sagarmatha Lumbini Insurance was formed in March 2023 through the merger of Sagarmatha Insurance Company Limited, which began operations in June 1996, and Lumbini General Insurance Company Limited, established in August 2005. The company’s head office is located in Naxal, Kathmandu.

As of mid-July 2026, Ceylinco Holdings PLC held approximately 11.4 percent of the company’s shares, followed by Lumbini Bikas Bank Limited with 4.2 percent, Manohardas Mul with 4.1 percent, and Laxmi Sunrise Bank Limited with 3.3 percent. The company’s shareholding structure comprises 51 percent promoter ownership and 49 percent public ownership.