Kathmandu: The strategic step of the Nepal Insurance Authority compelled many insurers to opt for mergers to meet the deadline for the minimum paid-up capital. A total of four mergers among insurers have been concluded successfully.
Siddhartha Insurance Company and Premier Insurer Company completed their merger and integrated business announced on Wednesday. The two insurers have commenced their business under the brand name Siddhartha Premier Insurance. It was the fourth merger among insurers. Earlier, Himalayan General Insurance and Everest Insurance Company kicked the first-ever integrated business under the brand name Himalayan Everest setting history in the insurance industry. The second merger among general insurers was the merger between Sanima General Insurance and General Insurance Company, these two companies conducted their business under the brand name Sanima GIC Insurance.
Among life insurance companies, the merger between Surya Life and Jyoti Life Insurance has made history as the first merger in life insurance. Suryajyoti Life was formed after the merger of two companies.
Further, 13 more insurers are in the process of merger.IME General Insurance and Prudential Insurance, Sagarmatha and Lumbini General Insurance, Ajod Insurance and United Insurance have already signed the memorandum of understanding for mergers.
Among life insurers, MoU has been signed between Mahalakshmi LIfe and Prabhu Life, Sanima Life and Reliance Life.
The progress on mergers among Gurans Life, Union Life and Prime Life insurance is in limbo amid delayed financial report preparation of Gurans Life Insurance. Gurans Life has yet to get its audit report of the previous FY 2077-78 approved by the Nepal Insurance Authority.
Sagarmatha Insurance and Lumbini General Insurance signed a merger agreement on 30 Asar 2079 with a swap ratio of 100:80. Both insurers have already finalized their due diligence audit (DDA) report.
IME General Insurance Limited and Prudential Insurance Company have signed a preliminary MoU for a merger with a swap ratio on equal footing.
Ajod Insurance Company and United Insurance Company signed the merger agreement on 27 Paush 2079 with a swap ratio of 100:90. These two companies will conduct integrated business under the brand name United Ajod Insurance. The Insurance Authority had given in-principle consent for the merger on 29 Paush, 2079.
The Insurance Authority has compelled most of the insurers to opt for merger to meet the minimum paid-up capital requirement within a very short span of time. Life insurers must maintain a minimum of Rs.5 billion and general insurers must maintain a minimum of Rs. 2.5 billion paid-up capital by the end of Chaitra 2079. Less than 45 days left to meet the deadline. Few of the insurers are hopeful to achieve the deadline without opting for merger and acquisiton.