Kathmandu: As the new life insurance companies aggressively expand their business, the old company’s market share is gradually shrinking. Numerically, the old insurance companies have lost their market share while the total market is growing. Two years ago, Nepal Life’s market share was over 35 percent. During this period, new and old insurance companies aggressively expanded the market and the share of old insurance companies gradually declining.
Though Nepal Life’s business is improving, it’s market share declined by 2.88 percentage points last financial year. The share of Nepal Life, which was 29.81 percent previous year, has dropped to 26.94 percent last year. However, the company’s life insurance premium income increased by 16.93 percent during the period. The company has collected Rs 31.96 billion, improving its net premium income by 16.93 percent.
Similarly, the second biggest loser is Life Insurance Corporation Nepal. LIC Nepal lost 1.82 percent market share. LIC’s market share has shrunk from 16.18 percent to 14.36 percent. National Life, ranked third, has improved its market share by 0.27 percentage points during last financial year. National Life has a market share of 10.21 percent. The company has improved its premium income by 32 percent to Rs.12.11 billion last year.
The three companies occupied about 51.50 percent of the market in last financial year. While the remaining 16 companies have 49 percent market share. Five years ago, the access to insurance in Nepal was only 7/8 percent. During this period new life insurance companies came along and the capital increase plans of the old companies also aggressively expanded the market. With the arrival of the new companies, the old ones got a good opportunity to expand the market. The bonus rate, life insurance fund and management of old insurers are better than new one. Taking advantage of this, they seem to have succeeded in expanding the market.
Of the new ones, Union Life has been the most aggressive. Last year, Union Life expanded its market share by 0.61 percentage points to 5.55 percent. Though its market share expanding, the ratio of policy surrender is skyrocketing. Its performance in profit making too is poor due to high operating expenses.
Last year, the market share of old companies Asian Life, Met Life, Prime Life has shrunk. New life insurance companies Prabhu and Mahalakshmi Life have also seen a narrow market share over the previous year. Apart from this, last year National Life, Union Life, Surya Life, Guransh Life, Citizen Life, Jyoti Life, Reliable Nepal Life, IME Life, Reliance Life, Sun Nepal Life and Sanima Life have succeeded in increasing their market share.