Kathmandu: Life insurance industry has witnessed surge in life fund by 22.83 percent in the last financial year 2078/79. According to the unaudited 4th quarter’s financial report published by the 19 life insurers, the total life fund’s size exceeds Rs.4.68 trillion in the last fiscal year.
The size of the life fund was Rs. 3.81 trillion during last fiscal year. Nepal Life alone has Rs. 1.37 trillion in it’s life fund. Which accounts 29 percent of the total life insurance fund of the 19 life insurers. LIC Nepal has a life fund of Rs. 93.36 billion while National Life Insurance has Rs. 51.11 billion in its life fund.
According to the 4th quarter’s financial report, Asian Life has Rs. 32 billion while Met Life and Prime Life have Rs. 20.44 billion and Rs.18.55 billion respectively. Surya Life has Rs. 14 billion, Guransh Life has Rs. 12.45 billion in its life fund.
Among new life insurers, Union Life has the highest amount in life fund. It has Rs. 11.27 billion in life fund. Jyoti Life has Rs. 6.34 billion, and Citizen Life has Rs. 5.81 billion. IME Life Rs. 4.71 billion, Reliable Nepal Rs.. 1.99 billion, Reliance Life Rs. 3.75 billion, Sun Nepal Life Rs. 3.51 billion, Sanima Life has Rs. 3.34 billion, Prabhu Life Rs. 3 billion and Mahalakshmi Life has Rs 2.12 billion in their life fund.
The savings from the insurance premium collected from the policyholders is allocated in the life fund. Such funds are used for short-term and long-term investment. The return from such investment is distributed to the policyholders and shareholders after actuarial valuation.
The size of existing capital fund of the 19 life insurers is Rs. 57 billion only. Similarly, life insurance companies have allocated Rs. 3.4 billion rupees in the catastrophe fund for risk coverage against possible loss from catastrophe. By the end of Asar 2079, the size of total paid-up capital of life insurers has reached Rs. 43.89 billion, while the reserve fund has Rs. 13.34 billion.
The Insurance Board, regulatory authority, has instructed the life insurers to increase their paid-up capital to Rs. 5 billion by the end of Chaitra 2079. Only eight months left to meet the deadline. The Board of Directors and top level management of the life insurers have made every possible effort to raise their capital to meet the regulatory capital requirement. If all 19 life insurers become able to maintain their paid-up capital to Rs. 5 billion, the total capital will reach Rs. 95 billion. But the size of total paid up capital of life insurers may vary due to the on going merger process among 10 life insurers.
