Prabhu Insurance Retains ‘IRN BBB+’ Rating as Negative Watch Is Lifted

Kathmandu — Infomerics Credit Rating Nepal Limited has reaffirmed Prabhu Insurance Limited’s issuer rating at ‘IRN BBB+’ and removed it from the rating watch list, where it had been placed under negative watch. The rating reflects the company’s ability to pay large claims from natural disasters, social unrest and other unexpected events, supported by adequate liquidity, a strong capital base and reinsurance arrangements.

The rating indicates a moderate degree of safety in meeting financial obligations on time, along with a moderate capacity to withstand risks.

The reaffirmation follows the company’s improved handling of claims from the September 2025 protests. These initially created an estimated liability of around Rs 211 million from 111 claims, of which the company retained about 34%. According to the rating report, after final assessments by the appointed evaluators and surveyors, management now estimates the final cost, including the reinsurers’ share, at around Rs 46 million. Most claims have been settled, with only about Rs 3 million outstanding.

The company also expects claims of around Rs 403 million from the August 2026 floods in Bhotekoshi. The report says its adequate liquidity, strong capital base and organised reinsurance arrangements should prevent significant financial pressure from these payments.

Prabhu’s capital adequacy ratio stood at 5.48 times in mid-July 2026, well above the regulatory minimum of 1.30 times. Growth in retained earnings, improvement in the insurance business and effective risk management have further strengthened its financial position.

Its financial performance has also improved. Gross premiums rose from Rs 1.78 billion in fiscal year 2023/24 to Rs 1.87 billion in 2024/25 and Rs 2.02 billion in 2025/26, giving it about 4% of the non-life insurance market. Its net claims ratio was around 38% in 2023/24 and 40% in 2024/25, before falling to around 31% in 2025/26, which the report notes is considerably lower than the industry average. Careful risk selection, prudent underwriting and adequate reinsurance have helped keep the claims burden under control even in adverse conditions.

Established in 1995, Prabhu Insurance is one of Nepal’s older non-life insurers, with more than three decades of experience through changing economic, social and political conditions. Its board is led by Rajendra Malla, who has decades of experience in banking and insurance, and its Chief Executive Officer, Sanchit Bajracharya, has more than 29 years in the industry. The company serves policyholders through 57 branches nationwide.

As of mid-July 2026, Prabhu had paid-up capital of Rs 1.85 billion and a net worth of Rs 3.57 billion. Promoters hold 51% of its shares and the general public 49%. Its major shareholders are the Employees Provident Fund (16.85%), Prabhu Bank Limited (10.91%) and Devi Prakash Bhattachan (6.03%).