Kathmandu: The current year seems to set a record in the history of the domestic insurance industry. A series of mergers among insurers is ongoing amid pressure from the regulatory authority, Nepal Insurance Authority, to increase the paid-up capital.
The merger in the Nepali insurance sector ignited after NIA increased the minimum paid-up capital requirements for insurers. The Authority has increased the paid-up capital of general insurance companies to Rs. 2 billion while it is Rs. 5 billion for life insurance companies. The insurers must meet the new paid-up capital requirements by Chaitra 2079. Only one month left before the completion of the deadline.
The first merger among the life insurance companies took place between Surya Life Insurance and Jyoti Life Insurance and rebranded to Suryajyoti Life Insurance. A few more life insurers are in the process of merger. The first merger MoU signed among Union Life, Prime Life, and Gurans Life Insurance is yet to conclude. Among 19 life insurers, Asian Life, Reliable Nepal Life, Citizen Life, and IME Life Insurance opted for raising capital without merger or acquisition.
Of the 19 general insurance companies, eight companies have merged to become four and have started their integrated business while 11 others are either under the merger process or raising paid-up capital with the right shares.
Himalayan General Insurance and Everest Insurance merged to form Himalayan Everest Insurance Insurance, and Sanima General Insurance and General Insurance Company merged to form Sanima GIC Insurance, Siddhartha Insurance and Premier Insurance merged to form Siddhartha Premier Insurance, Sagarmatha Insurance, and Lumbini General merged to form Sagarmatha Lumbini Insurance.
According to NIA, nine life insurance companies entered into merger deals to become four entities.
