Nepal Non-Life Insurers Face Investment Decline Amid Surge in Flood Damage Claims

Non-life insurance companies in Nepal faced a significant increase in claim payments due to flood and landslide damages, with claims rising by nearly 40% to Rs 25.26 billion in the last fiscal year. This surge in claims resulted in a 13.18% decrease in non-life insurer investments, despite an increase in paid-up capital from shareholders. The total investment by non-life insurers dropped to Rs 69.74 billion, impacting shareholder returns negatively. Although claim payouts increased, the total number of individual claims in the non-life sector slightly decreased by 0.82%. The life insurance sector, in contrast, experienced growth with claim payments increasing by 20.63% to Rs 78.98 billion. This growth was supported by increases in insurance premiums, paid-up capital, and life insurance funds, raising overall investments in the insurance industry to Rs 829.4 billion. The data reflects the insurance market's challenges in balancing claim payouts with sustainable investment levels amid natural disaster impacts, highlighting the need for ongoing risk and capital management strategies.