All But Three Insurance Companies Hold AGMs on Time

Kathmandu — Insurance companies that had long struggled to conduct their annual general meetings (AGMs) on schedule are now showing improvement. Due to repeated directives from the Insurance Authority in recent years and ongoing coordination with companies, all but three insurers currently in operation have completed their AGMs on time.

The government-owned Rastriya Beema Company and Nepal Reinsurance Company, along with privately owned United Ajod Insurance, have yet to hold their AGMs.

Last year, most insurers completed their AGMs nearly nine months into the fiscal year. This year, however, the majority have completed them within six months of the fiscal year ending.

Both life and non-life insurance companies have proposed attractive returns for investors through a mix of bonus shares and cash dividends. In the life insurance segment, Life Insurance Corporation (LIC Nepal) and Nepal Life Insurance announced the highest total dividend of 21.1 percent.

LIC Nepal focused mainly on cash payouts, offering a 21.05 percent cash dividend. Nepal Life distributed a combination of 5 percent bonus shares and 16.05 percent cash dividends.

Sun Nepal Life declared a 20.3 percent cash dividend, while Citizen Life offered 20 percent. National Life Insurance announced a total dividend of 12.5 percent, including 4 percent bonus shares and 8.5 percent cash. Prabhu Mahalaxmi Insurance announced a total dividend of 8.42 percent, made up of 4 percent bonus shares and 4.42 percent cash.

Among life insurers, Himalayan Life Insurance was the only company that did not distribute any dividend from last year’s profits.

Only a few life insurers, including Nepal Life, Sun Nepal Life, Prabhu Mahalaxmi Life, and Asian Life Insurance, issued bonus shares from last year’s earnings. After the introduction of risk-based capital requirements, most companies have limited bonus share issuance to what is necessary to meet capital needs.

In the non-life segment, Siddhartha Premier Insurance offered the highest cash dividend at 25 percent. Neco Insurance announced a total dividend of 15.8 percent, including 3 percent bonus shares and 12.78 percent cash.

Sagarmatha Lumbini Insurance announced a 15 percent cash dividend. Prabhu Insurance proposed a total of 9.17 percent, including 8.7 percent bonus shares and 0.47 percent cash. Himalayan Everest Insurance and Shikhar Insurance also announced dividends of 8 percent and 6.32 percent, respectively.

Among non-life insurers, only Shikhar, NLG, Neco, Prabhu, and Sanima GIC issued bonus shares.

Most companies appear to have balanced bonus shares for capital growth and cash dividends for immediate returns.

However, United Ajod Insurance has still not held last year’s AGM. Similarly, the government-owned Rastriya Beema Company Limited has also not conducted its AGM.

United Ajod Insurance is set to issue rights shares equivalent to 10 percent of its paid-up capital starting from April 9.