Kathmandu: Life insurance companies have been benefited from the surge in bank interest rate amid prolonged liquidity crunch in the bank and financial institutions(BFIs). Life insurers have earned enough profit in the first quarter of current financial year with high return from term deposit.
According to the unaudited quarterly financial report of 19 life insurers, the net profit has increased by 58 percent as compared to the same period of last FY. Commercial bank’s have offered 11 percent interest rate against term deposit to attract deposit.
The total profit of 19 life insurers stood Rs.1.71 billion in Q1 of 2079-80. The companies had earned a net profit of Rs. 1.08 billion during Q1 of last FY. The profits by companies may vary after actuarial valuation and financial audit.
Jyoti Life Insurance has posted a growth of 133 percent in net profit income and earned Rs. 21.52 net profit which is the highest among life insurers. Surya Life has earned second highest profit Rs. 20.73 crore with a surge of 82. Both of these companies are in the final stage of merger.
Nepal Life has earned net profit of Rs. 17.57 crore. The profit of Nepal Life has been affected by the provisioning against loss from investment in the stock market. Even though the interest income has increased, the stock market fall has made a negative effect on net profit.
Sun Nepal Life is at fourth position with Rs. 15.03 crore net profit and Reliance Life has earned Rs.13.17 million net profit with an increase of 217 percent. National Life has made a profit of Rs. 11.71 crore which is 35 percent plus than last FY’s Q1. Asian Life has earned a profit of 11.70 crore.
Contrary to the profit surge by other life insurers, LIC Nepal has witnessed loss of Rs. 59 lakh 29 thousand in Q1 of current FY. The provisioning against loss in the stock market has resulted loss ot LIC Nepal.