Kathmandu: Life insurance companies have spent Rs 7.90 billion by the end of the third quarter of the current fiscal year. According to the financial statements of the companies published in the third quarter, Nepal Life, National Life, Union Life and Life Insurance Corporation (Nepal) are among the companies that have spent the most on management expenses.
Due to limited information available,this news doesn’t include the percentage of management expenses over the premium earnings of life insurers.
As of the third quarter of the current FY, NLIC has the highest management expenses of Rs 950.8 million so far till this quarter.The second highest is the National Life Insurance. The company has spent Rs 791.3 million during the period.
Union Life Insurance Company stands at the third position in terms of highest management expenses. The company has spent Rs 705 million on management till mid-April. Similarly, Life Insurance Corporation (Nepal) is in the fourth place. The company has spent Rs 634.6 million on management during the period.
During the period under review, Asian Life contributed Rs 482.9 million, Surya Life Rs 449 million, Prime Life Rs 436.5 million, Citizen Life Rs 535.7 million, Gurans Life Rs 409.5 million and Jyoti Life Rs 346.6 million. Reliance Life has spent Rs 346.1 million and Met Life has spent Rs 342.2 million.
Similarly, IME Life has Rs 305 million management expenses while Prabhu Life Rs 288.5 million, Sun Nepal Life Rs 244 million, Reliable Nepal Life Rs 242.9 million, Sanima Life Rs 18.69 billion and Mahalakshmi Life Rs 167.4 million. Rastriya Bima Sansthan has spent Rs. 142.9 million on management.
As insurance companies expand their branch operations across the country, management expenses are rising. The management cost of Rastriya Bima Sansthan, which has not paid much attention to the branch network, is the lowest.
The management expenses of some insurance companies are unjustified in terms of their workforce, premium earning and branch network.Higher expenditure on management expenses may not be good for the companies profitability. It will ultimately