Insurance Companies Increase Investments in Productive Sectors

Kathmandu – Insurance companies in Nepal have significantly increased their investments in productive and infrastructure sectors, a shift driven by amendments in the investment guidelines introduced by the Nepal Insurance Authority. The revised guidelines, which encourage investments in agriculture, energy, tourism, and other infrastructure projects, have expanded the scope for companies seeking to diversify their portfolios.

According to the authority’s data, insurance companies invested NPR 11.24 billion in productive sectors during the first quarter of the current fiscal year 2081/82. This marks an approximately 50% increase compared to the NPR 7.51 billion invested during the same period last year. Life insurance companies contributed the majority, investing NPR 10.25 billion, while non-life insurance companies invested NPR 991.6 million.

Among life insurance providers, Rastriya Beema Company led with an investment of NPR 4.77 billion. Out of the 14 life insurance companies operating in Nepal, 8 have ventured into productive sectors. Similarly, 5 out of 14 non-life insurance companies have allocated funds to infrastructure and production.

The shift in investment strategy began in 2075 when the Insurance Board amended the investment guidelines, allowing companies to invest in real estate, hydropower, agriculture, and tourism in addition to fixed deposits and shares. The revised directives also specify minimum and maximum limits for investments in various sectors, including 40% in fixed deposits of Nepal Infrastructure bank, up to 20% in development banks, and 10% in finance companies.

For investments in tourism, aviation, and real estate, companies must submit feasibility reports and business plans, with prior approval from the authority required before proceeding.

By Ashoj ( mid-October) of this fiscal year, life insurance companies had total investments of NPR 677.59 billion, while non-life insurance companies invested NPR 67.34 billion. Over 60% of these investments remain in fixed deposits with banks and financial institutions, reflecting the sector’s cautious yet expanding approach to productive investments.