Reliable Nepal Life’s ‘A-’ Rating Reaffirmed; Strong in Claims Settlement and Risk Management

Kathmandu — Credit rating agency CARE Ratings Nepal has reaffirmed the issuer rating of Reliable Nepal Life Insurance, maintaining its ‘CARE-NP A- (Issuer)’ rating. The rating indicates that the company provides an adequate degree of safety with respect to the timely servicing of its financial obligations and is considered to have a low credit risk profile.

According to the company’s audited financial statements, its overall financial performance remains satisfactory. The report highlights a steady improvement in profitability, with insurance claims, commission, and operating expense ratios remaining under control. Stable growth in investment income has also strengthened overall earnings. During the period, premium collection continued to grow, while expenses were managed under strict controls, the company stated.

The report further notes that the company benefits from an experienced board and management team, satisfactory asset quality within its investment portfolio, adequate reinsurance arrangements, and a branch network that has expanded nationwide. It also states that the company’s ability to profitably expand its business, diversify across insurance segments, maintain the quality of its investment portfolio, and preserve a sufficient cushion above regulatory solvency requirements will remain key rating sensitivities going forward.

As of mid-April 2026, the company operated 9 branches and 85 sub-branches. The expansion of its branch network has been assessed as a significant contributor to market growth, brand promotion, and direct customer outreach. During the same period, the company had 33,390 insurance agents across the country.

In terms of reinsurance arrangements, the company has entered into agreements with Nepal Reinsurance Company Limited and Himalayan Reinsurance. In accordance with regulatory requirements, the company transfers 4 percent of its risk directly to each domestic reinsurance company. Under its facultative reinsurance structure, the company transfers 85 percent of risk exceeding its retention limit to Nepal Reinsurance Company Limited and the remaining 15 percent to Himalayan Reinsurance. The arrangement has further strengthened the company’s risk management framework.

Similarly, for life insurance policies issued before 2023, the company has a reinsurance agreement with Hannover Re SE. Under this arrangement, risks are shared based on an agreed allocation structure, with a retention limit set at NPR 500,000. For all claims, the company maintains a self-retention limit of NPR 100,000. The report notes that life insurance is inherently a long-term business and is sensitive to economic and insurance-related risks such as mortality rates, rising healthcare costs, and fluctuations in interest rates. As a result, maintaining adequate reserves is considered essential. Such reserves help ensure future claim payments, potential large claims, and policyholder returns, while supporting the company’s long-term financial stability.

The company’s investment portfolio has also continued to expand. By the end of the first nine months of the current fiscal year, the portfolio had grown by 12.04 percent compared to the previous year. Of the total investment portfolio, 72.30 percent was held in fixed deposits with banks and financial institutions, up from 67.86 percent during the corresponding nine-month period a year earlier. According to the report, this provides the company with a strong liquidity buffer.

Other investments include debentures, private equity investments, equity instruments, and mutual funds, all made in accordance with the provisions of the Investment Guidelines 2023. Since the majority of the company’s investments are concentrated in deposits with banks and financial institutions, its investment income is primarily derived from interest earnings, supplemented by realized gains from the sale of shares.

The analysis concludes that the company’s overall financial structure, risk management system, and investment strategy have strengthened its stability and long-term growth prospects. Its ability to maintain an adequate cushion above regulatory solvency requirements is also identified as a key positive factor.

The company was incorporated under the Insurance Company Act, 2006 and registered with the Office of the Company Registrar on December 4, 2007. It received its operating license from the Insurance Board (now the Nepal Insurance Authority) on August 2, 2017. As of April 14, 2026, the company’s total asset base had reached NPR 24.35 billion.