Neco Insurance Accused of Illegally Undercutting Rivals to Capture Market Share

Kathmandu — Neco Insurance Company Limited has come under scrutiny for allegedly offering benefits outside approved policy terms to lure clients away from competing insurers.

The Nepal Insurance Authority has sought clarification from the company following reports of irregular practices. Instead of focusing on organic growth, Neco Insurance is accused of targeting existing clients of other insurers across both fast-track and standard segments.

Sources say the company has engaged in price undercutting and extended unauthorized benefits in violation of insurance regulations. Neco Insurance, which was fined NPR 200,000 last month, may face further regulatory action.

The company has a history of similar violations. It was previously penalized for issuing agricultural insurance policies that deviated from approved terms. CEO Ashok Khadka is alleged to have continued such practices despite regulatory oversight, reportedly relying on political backing.

Regulators have repeatedly flagged Neco Insurance as one of the most frequently penalized firms in the sector. In a previous case involving fire insurance for a tea estate in Ilam, the company was found to have made off-policy commitments. Company representatives declined to comment when contacted, stating they would only respond to concerned parties.

Industry executives claim Neco Insurance routinely takes over projects from competitors by offering incentives not included in standard insurance plans, particularly where similar policy structures would otherwise limit such takeovers.

There are also allegations that high-value equipment has been deliberately classified as low-cost items to offer cheaper coverage. Competitors say the company has used such tactics to win business from both leading insurers like Shikhar Insurance and smaller firms such as National Insurance Company.

Employees have reportedly raised concerns internally about violations of insurance laws and policy standards. However, they claim they have been pressured to comply. Sources say staff have been warned of job loss, and in meetings are told that new business cannot be secured without bending regulatory rules.