Kathmandu: The high interest rates in the term deposit and the on going economic crisis has adversely affected the new business income of life insurance companies.
The life insurers are forced to shift their focus on renewal premium income rather than the new business income.For the last four months the growth rate of life insurance business is witnessing downfall.
The crunch of investable funds in the bank and financial institutions (BFIs) has also made an adverse impact to the life insurance business and posed threat of business competition.
General consumers are opting to invest more on term deposits than on long term endowment plans.
According to the Nepal Insurance Authority, 19 life insurance companies have earned a total of Rs.46 billion within first four months i.e. till Kartik end of current FY 2079-80. The total insurance premiums income includes Rs. 36.89 billion received from renewal premiums. Life insurers have been able to earn only Rs.9.11 billion in the first four months of current FY.