IB’s decision to fix minimum rate for non-tariff business shows positive impact on engineering insurance

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Kathmandu. The insurance premium income for engineering insurance has been increased by 67 percent after the Insurance Board’s decision to fix the minimum tariff rate for engineering insurance. The IB had fixed the minimum rate for non-tariff business in the last week of September.

The construction business ‘contractors’ used to insure hydropower, roads, residential and commercial buildings, offices, schools, universities, hotels, restaurants, hospitals, airports, buildings, etc. comparatively at a very low rate. In some cases, insurance companies even offered  insurance coverage all most at zero cost. It was also used as a medium to show that an insurer’s annual business target has been achieved.. Due to which the risk was being accepted even not much surplus for the re-insurance of such risk.

Non-life insurance companies have earned Rs. 9.49 billion in the Q1 of the current fiscal year 2078/79. Out of which, Rs 1.13 billion has been earned through engineering insurance. The market share of engineering insurance business has reached to 12 percent. Non-life insurance companies had earned Rs. 8.30 billion in premiums in the Q1 of the last fiscal year. They had earned Rs 679.2 million in insurance premiums through his engineering business.
The insurance companies have earned Rs 3.74 billion through motor insurance in a period of three months improving the business of motor insurance along with engineering this year. The market share of motor insurance in general insurance business is 39 percent.

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