Earthquake Premium Reserve Doubles; Nepal Insurance and Rastriya Beema Company Still in the Risk Zone
Kathmandu — Nepal’s non-life insurers more than doubled their earthquake premium reserve fund over the past year, strengthening their financial preparedness against seismic risk. However, two of the country’s oldest insurers (Nepal Insurance and Rastriya Beema Company) have yet to set aside any reserves for earthquake-related liabilities.
The industry’s earthquake reserve fund reached NPR 455 million by the end of the latest fiscal year, compared with NPR 207.9 million a year earlier. That represents an increase of about 120 percent.
Neco Insurance maintained the largest earthquake reserve among all non-life insurers. The company increased its reserve by 275 percent year-on-year, raising it from NPR 27.5 million last year to NPR 79.1 million.
Prabhu Insurance recorded the second-highest growth. Its earthquake reserve climbed 244 percent, increasing from just over NPR 10 million to NPR 35.2 million during the review period.
NLG Insurance ranked third in terms of reserve growth. The company expanded its earthquake reserve by 149 percent compared with the previous fiscal year.
The sharp increase reflects a growing emphasis on strengthening insurers’ financial capacity to absorb losses arising from major earthquakes. Even so, the absence of dedicated earthquake reserves at Nepal Insurance and Rastriya Beema Company continues to stand out, given their long history in Nepal’s insurance sector.
