Bearish stock market shrinks employees’ bonus of life insurers

Kathmandu: As the profits of life insurance companies fall sharply, so does the bonus that employees receive.

In the third quarter of the current fiscal year, the life insurance company have allocated only Rs. 256.9 million for the employees. Insurance companies had allocated Rs. 359.1 million in the same period of last fiscal year.

Nepal Life, which distrivutes the highest bonus in the industry, witnessed a huge loss in the thir quarter due to provisioning made for possible loss from investment made in the secondary market.

The bearish stock market in the third quarter has had an impact on insurance companies’ profits. When the stock market plummeted, insurance companies had to make provisioning as the market price of share went below their purchase price. If the stock market improves and the cost exceeds the purchase price, such provisioning will decrease and profits may increase.

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