Kathmandu: Life insurance companies’ claim payments have surged by 30 percent in the first nine months of current fiscal year. Life Insurers have paid claims of Rs. 45.19 billion till Chaitra end.
Older insurance companies have to pay large sums of money when the insurance matures. But analysts say that in some insurance companies, surrender claims are too high. During the first nine months of this fiscal year, LIC Nepal has paid the highest amount of Rs. 13.62 billion. The company’s claim payments increased by only 0.17 percent.
Similarly, Nepal Life Insurance Company’s claims payments has increased by 45 percent this year. It has paid Rs 10.60 billion against claim. The company had paid Rs 7.29 billion against claim in the same period last year.
Highest sum against claims are paid by the old insurance companies while the surge in percentage is very high in new companies. This year, more than 100 percent of the life insurance companies did not have to pay any claims till last year. Prabhu Life, which had paid Rs 53.4 million last year, has paid Rs 276.6 million, with an increase of five times this year.
In new companies, claims payments have been high due to the death of the insured from Covid19. This year, death claims payments by life insurance companies have increased due to Covid19 though maturity claims are higher than death claims.
On the other hand, another reason for the increase in claims this year is the huge increase in surrender.
Money back policy is another reason why claims payments are so high. The premium paid by the insured every year in the money back policy is refunded at the rate of 5/10/15 percent. Such amount also falls under claim payment.
Older life insurance companies have witnessed an increase in policy maturity over the years. As a result, Met Life has paid Rs. 3.11 billion, National Life Rs. 4.21 billion, Rastriya Bima Sansthan Rs. 4.11 billion, Gurans Life Rs 1.17 billion and Asian Life Rs 1.16 billion this year.
Among the new ones, the Union Life alone has paid claims of Rs 2.38 billion. The company’s claim payments have increased by 63 percent compared to last year. Met Life, which has paid the lowest claims, has also witnessed surge in claim payment by 342 percent this year.