Kathmandu: During the first nine months of the current fiscal year, the agents of life insurance companies have paid a commission of Rs. 11.31 billion. Agent commission has increased by only 1.50 percent compared to the same period of the previous fiscal year.
Agent commission of most old life insurance companies has decreased. The agent commission of insurance companies has started declining along with the decline in the growth rate of first premium income. The lack of liquidity in the banking sector in the current fiscal year and the impact of the economic downturn is affecting the insurance company’s first premium income.
Older insurance companies have started focusing more on renewal insurance fees in addition to earning the first premium.
There’s sharp decline in the agency commission of Guransh Life (37%) and Rastriya Beema Sansthan (31%). Similarly, the agency commission and incentives of LIC Nepal (8%), Nepal Life (7%) and Prime Life (7%) have also declined. Contrary to that, Prabhu Life’s agency commission has increased by 38 percent while Citizen Life’s by 32 percent. Reliable Life has an increase of agency commission by 29 percent, Mahalakshmi Life by 25 percent and Surya Life by 24 percent.
The agency of Nepal Life have received a commission of Rs 2.63 billion. LIC Nepal has paid Rs 1.29 billion and National Life has paid Rs 1.10 billion to their agency. While the total agency commission of 19 companies is Rs.11.31 billion, these three life insurers have alone have paid more than Rs. 5 billion.