Kathmandu: The growth rate of life insurance business has witnessed decline in the first quarter of current fiscal year amid the on going economic recession. In the last fiscal year, there was a growth of over 30 percent, but in the Q1 current FY 2079-80, only a growth of 7 percent has been observed.
The liquidity crunch and mounting trade balance and inflation has created adverse impact on new business insurance premium income of life insurance companies. With the economic recession, ‘insurance’ has started to go beyond the priority of common people. Professional life insurance agents too are worried with the prolonged recession and liquidity crunch.
Another reason for the decline in business growth is the ‘merger’ among many life insurers. The employees and agents of companies under merger process have slowed down their performance amid their chaos regarding their status in the company after merger. The business of Guransh Life, Union Life, Prime Life, Prabhu Life has declined. Also, since the top management of the company is busy with the merger process, there is no pressure on the employees to meet their business target.
During the period under review, the business of state-owned Rastrisya Beema Sansthan has declined by 75 percent to Rs. 1 billion 11 crore. Similarly, the second biggest decline is in the business of LIC Nepal. The net insurance premium income of the company has decreased by 14 percent to Rs. 4 billion 49 crore in Q1 of current FY 2079-80.
Similarly, Guransh Life’s has witnessed a decline of 13 percent to Rs. 74 crore 32 lakh. Reliable Nepal’s business has been declined by 8 percent to Rs. 85 crore 29 lakh. Prabhu Life’s business declined by 7 percent to Rs. 51 crores, Met Life’s declined by 3 percent to Rs. 1.26 billion. Prime Life’s business declined by 1 percent to Rs. 1.14 billion, Reliance Life’s 0.76 percent to Rs. 72.99 crore and Sanima Life’s by 0.30 percent to Rs. 54.91 crore.