Life Insurers Hold Rs.5.86 Trillion in Funds, Majority Concentrated in Term Deposits

Kathmandu: The total size of life funds and other reserves with the life insurers accounts for Rs. 5.86 trillion by the end of the second quarter of the current financial year. According to the unaudited quarterly financial reports of the life insurers, the life insurers mobilize a total of Rs.5.86 trillion including paid-up capital, reserve funds, life insurance funds, and catastrophe reserve.

The capital fund of commercial banks is around Rs. 5.98 trillion including Rs. 3.69 trillion in paid-up capital and Rs.1.23 trillion in reserve funds. The paid-up capital of the life insurers is Rs. 49.33 billion only. There is Rs. 15.24 billion in the contingency fund and Rs. 3.04 billion in catastrophe funds. Apart from this, the insurers have a life fund of Rs. 5.19 trillion.

The largest portion of the funds with the life insurers is concentrated on the term deposits of the ‘A’ class commercial banks. BFIs hold above 70 percent of the funds of life insurers. With the introduction of the new Investment Guidelines For Life Insurers by the Nepal Insurance Authority, there’s the possibility of diversification of the investment.

Nepal Life Insurance (NLIC) has the largest size of life funds. NLIC has life funds of Rs. 1.5 trillion. It accounts for above 27 percent of the total size of life insurance funds of the entire life insurers. The second largest LIC Nepal (LICN) has Rs. 1.01 trillion and the reserve fund of Rs. 1.7 billion. The insurer has a paid-up capital of Rs.2.75 billion and reserve funds of Rs.1.07 billion.

National Life Insurance (NLICL) has a life insurance fund of Rs. 56.15 billion and catastrophe funds of Rs. 372.1 million. Its paid-up capital is Rs.4.64 billion and Rs.266.5 million in its reserve funds. The accumulated funds of these three life insurers account for around 55 percent of the total funds with the 18 life insurers.

Rastriya Beema Sansthan, a state-owned life insurer, has a life insurance fund of Rs. 45 billion. Its paid-up capital is only Rs.181 million. Asian Life Insurance (ALICL) has a paid-up capital of Rs. 2.9 billion, a reserve fund of Rs. 530 million, and a life fund of Rs. 34.8 billion while it has a catastrophe fund of Rs. 170 million only.


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