Kathmandu: With the ongoing merger among insurance companies, the market seems concentrated. The general insurance market has witnessed that the aggregate of 36 percent market share is concentrated in the four companies formed after the mergers of eight general insurance companies. To date, four companies have emerged after the merger of eight insurance companies, i.e. Himalayan Everest Insurance, Sanima GIC Insurance, Siddhartha Premier Insurance, and Sagarmatha Lumbini Insurance.
The latest merger was between Sagarmatha Insurance and Lumbini General Insurance. These two companies kicked off their integrated business from 29 Falgun 2079. The sum of the insurance premiums collected by these two companies amounts to NPR 2.8 billion which accounts second largest sum among general insurers.
Shikhar Insurance Company has the largest market share in the general insurance business. It covers above 11 percent of the total business of general insurance companies.
Himalayan Everest Insurance, which created the history of the first merger in Nepal’s insurance industry, could not retain the previous business of Himalayan General Insurance and Everest Insurance Company. Its market share is limited to 7.36 percent. The integrated business of the two companies kicked off from the 1st Sawan of FY 2079-80. Before the merger, i.e. by of Asar 2079, the insurance premium income of Himalayan General was NPR. 2.06 billion while that of Everest Insurance was NPR 1.22 billion. The sum of the businesses equals NPR 3.28 billion. But by the end of Magh 2079 of the current FY, i.e. in the first 7 months, the insurance premium of Himalayan Everest Insurance was Rs.1.69 billion. Based on the achievement of the last seven months, it can be estimated that the bigger company cannot even achieve last year’s business.
The second merger in the general insurance sector was between Sanima General and General Insurance Company. The two companies started joint business in Kartik in 2079. Before the merger, the combined total insurance premiums of the two companies was NPR 53 crores which crossed NPR 1.19 billion by the month of Magh 2079.
The third merger in the general insurance sector was between Siddharth Insurance and Premier Insurance. The sum of the insurance premiums income of these two companies was NPR 2.7 billion. Based on the aggregate premiums of these two companies, the market share remains at 11.71 percent. We may need to wait for a few more months to see whether the emergence of Siddhartha Premier Insurance will deliver positive outcomes or not.
