Dr. Ravindra Ghimire, a PHD in Insurance, has been appointed as the chairman of Nepal Reinsurance Company. Here we have his exclusive interview on the ongoing affairs and future perspective of re-insurance industry of Nepal.
How much difference are you experiencing in your role as the chairman of the company and in academic job?
The job of the board is to make policy decisions. However, I found the task of practicing very challenging. The operational activities are handled by a team of professionals. We have experienced people of BODs and there is also a team of long experienced people in the organization’s management. Another important task of the re-insurance company is to promote the research, analysis and insurance industry for which we will do our best.
Nepal Re-insurance Company was enjoying a monopoly on domestic re-insurance business for the past few years. Now another competing company has been established from the private sector. What’s your strategy now?
In the insurance industry, co-operation is more than competition because co-operation is needed to share risk and not competition. We are serving in the domestic market but we have given equal importance to foreign market too. We have a good chance of getting a good share in the global re-insurance market. The strategy now is to develop Nepal Re as a reliable re-insurance company in the global arena.
On time claim payment in insurance and re-insurance business is said to increase trust in the company. Nepal Re has a large amount of outstanding claims. How are you making your company reliable in terms of timely servicing of claims?
We have been redeeming the claims payable. The administrative side of claim payment is being simplified. In the coming days, faster service delivery will be ensured to win the hearts of our customers. We have already taken steps; you will see the results soon.
As per the directive of the Government of Nepal, 20 percent of Direct Cession has been enjoyed by your company. Why Nepal Re is unable to get international business as expected?
We have taken initiatives in the past to bring in international business. Till date, foreign re-insurance business contributes 20 percent of the total premium. This is not disappointing though. But gradually the share should be increased and we will continue our efforts for that.
How reasonable is the instruction given by the Insurance Board to the Insurance companies of Nepal for mandatory re-insurance with the National Re-insurance companies?
This instruction should have been issued with the intention that the money of re-insurance business should not out fly to abroad upto the risk management and risk bearing capacity of the companies in national re-insurer. I don’t see any reason to think this idea is bad. In insurance and re-insurance, cooperation, interaction, correlation, and mutual understanding between companies would not be the subject of controversy. We also know that centralizing risk in one place is not right according to the principle of insurance. Therefore, no one seems to say that all the risk should be given to us. Even re-insurance companies do not carry the risk themselves. The circular has also provided space to seek for foreign re-insurance support if denied by the domestic re-insurers.
If there is ambiguity in any of the issues, it seems that those issues can be resolved through tripartite dialogue (Insurance Board, Insurance Company and Reinsurance Company). Yes, there is no Nepali re-insurance company as strong as the world’s renowned reinsurance companies. We are focused on capacity building and in the future we will develop not only the our risk bearing capacity for the Nepalese insurance companies but also for many countries of the world. In that case, the doubts and suspicions seen today will disappear by themselves.
What are the challenges in the business expansion of Nepal Re?
Nepal Re has already made its presence felt in the global market. We have good and reliable companies working together. We have borne their risk and they have borne our risk. We need skilled manpower to for international re-insurance business.
What are your future plans for taking the company to new heights?
Taking a company to new heights is to increase the company’s credibility, increase its net worth, and grow its business. For that, the company aims to broaden the domestic market and increase the capacity of insurance companies. Accordingly, to expand business relations with foreign countries and bring in good business. It will take some time. We have to move forward in a strategic way. Once the strategic plan is ready, we will make it public.
