Kathmandu. According to the directives of the Nepal Insurance Authority, every independent micro insurance company operating has a mandatory paid-up capital of Rs 750 million to enter the market. However, the actual condition of the internal technical manpower of these companies with the capital strength and financial base of about Rs 1 billion is found to be very weak.
According to a study report titled ‘Digital Transformation and Insurtech Readiness: A Pilot Assessment of Micro Insurance Companies in Nepal’ published by the Insurance Authority, most of the micro-insurance companies are operating with only one or two dedicated IT employees to manage the network of more than 30 to 44 branches and hundreds of employees spread across the country.
Despite claims of huge capital and infrastructure, the very critical technical aspects such as sensitive digital networks, cybersecurity systems, and cloud architecture operate with very few manpower, which shows a huge contradiction between regulatory standards and practical realities.
Despite having a strong capital base and large branch network, the compulsion to rely on a one- or two-person IT desk for everything from simple technical troubleshooting to managing complex digital systems poses serious structural risks to service delivery and technical security of these organizations.
Liberty Micro Life Insurance: The IT department in this company is based on very low manpower. Where only one dedicated IT employee is working as the Chief Information Technology Chief. He is the only one who runs the department.
Protective Micro Non-Life Micro Micro Insurance Company: Even in this non-life micro insurance company, there is only one dedicated IT employee in the IT department, Anuj Singh KC, working in the ICT department. He has managed the technical management and troubleshooting of more than 41 branches and more than 100 employees.
Star Micro Insurance: The company has two people working in the IT department, including Suman Rai. Even in this organization with more than 50 branches and more than 100 employees, only two people have to support the entire digital system and technical support from a distance.
Trust Micro Non-Life Insurance: Saral Bista is leading this department, in collaboration with Sudhir Sharma, the head of the Human Resources Department. However, the size of the technical manpower is very small.
Crest Micro Life Insurance: Mr. Prasang Regmi is the Head of Information Technology in this company. Here too, the report indicates that a limited technical team has to bear the burden of the entire digital infrastructure and system.
Nepal Micro Insurance Company: The report does not disclose the detailed technical population due to lack of consultation meeting in respect of Nepal Micro Insurance and some other companies.
The report points out that there is a huge gap in the subject matter of expertise and experience of the IT manpower working in the entire micro insurance sector. In most companies, the IT department is limited to one or two people. They have to handle network management, cyber security, cloud server surveillance and remote troubleshooting of dozens of branches at the same time.
They are under intense pressure to solve specialized software, data security and complex technical problems in the insurance sector alone. This has led to a lack of cybersecurity policies, emergency data retrieval and strong technical governance, the report concluded.
