Kathmandu: Non-life insurance companies have earned Rs 3.97 billion in re-insurance commission. There are twenty non-life insurance in operation.
During last fiscal year 2077/78, Shikhar Insurance Company has earned the highest re-insurance commission of Rs. 606.9 million. Similarly, Siddhartha Insurance Company has earned Rs. 353.7 million. Sagarmatha Insurance has earned Rs. 328 million, NLG Insurance Rs 319.8 million, IME General Rs 236.3 million, Premier Rs. 218.6 million, Prabhu Insurance Rs. 204.4 million and NECO Insurance Rs. 203 million reinsurance commission.
Similarly, Azod Insurance has earned Rs. 193 million, Lumbini General Rs. 183 million, Rastriya Bima Company Rs. 176.9 million, Nepal Insurance Rs. 162.2 million, Sanima General Rs.128.6 million and United Rs. 126.1 million as reinsurance commission.
Besides, General Insurance earned Rs. 123 million, Himalayan Rs. 114.8 million, Prudential Rs. 111 million, Everest Insurance Rs. 109.8 million, Oriental Rs. 51.3 million and National Insurance Rs. 40 million earned as reinsurance commission.
It is the practice of the insurance companies to transfer the financial risk to the re-insurance company through a re-insurance treaty in addition to what they can bear as they cannot bear the entire risk.
Some portion of re-insurance fee paid by the insurance companies are refunded by the re-insurers as commission. The commission is provided in order to support to cover the underwriting expenses and other administrative expenses of the ceding company(insurance company).
