Non-Life Insurance companies’ Profit Falls 47% amid surge in claims after protests and floods

KATHMANDU: The profitability of Nepal’s non-life insurance sector has sharply declined by 47.23 percent in the third quarter of the current fiscal year 2082/83, largely due to a surge in insurance claims following last year’s Gen Z protests and devastating floods and landslides.

According to financial statements published by 14 operating non-life insurance companies, the combined net profit dropped to NPR 1.27 billion, compared to NPR 2.41 billion in the same period last year.

Industry insiders say the spike in claim settlements related to large-scale damages from the Bhado 23–24 Gen Z movement and the monsoon-triggered disasters in Ashoj significantly strained insurers’ balance sheets.

Two Companies in Loss

Out of the 14 companies, United Ajod Insurance and National Insurance Company reported losses during the review period.

National Insurance posted a loss of NPR 176.4 million, although it was also in loss during the same period last year. United Ajod Insurance reported a loss of NPR 69.7 million, reversing a profit of NPR 116.1 million in the previous year.

Sharp Decline in Major Insurers

Among individual companies, IGI Prudential Insurance recorded the steepest decline in profitability, with net profit plunging by 99.83 percent to just NPR 438,000, down from NPR 265.1 million a year earlier.

Deputy CEO Sharan Regmi said the drop was mainly due to increased claims triggered by the Gen Z movement, adding that there were no other major structural reasons behind the decline.

Similarly, Siddhartha Premier Insurance also attributed its reduced earnings to the same events, reporting a profit of NPR 4.01 million, compared to NPR 453.6 million last year—a decline of 91.15 percent.

Other insurers also saw significant contractions. NLG Insurance profit fell by 71.78 percent to NPR 34.8 million, while Shikhar Insurance reported an 80.23 percent decline to NPR 70.5 million.

Sanima GIC Insurance recorded a profit of NPR 51.3 million, down from NPR 233.5 million, reflecting a 78.01 percent drop.

Mixed Performance Across Sector

Despite the overall downturn, several companies remained profitable. Himalayan Everest Insurance earned NPR 110.5 million, while Sagarmatha Lumbini Insurance posted NPR 70.5 million. Nepal Insurance earned NPR 106 million, Neco Insurance made NPR 163.9 million, and Rastriya Beema Company reported NPR 288.9 million.

Compared to last year, all of these companies also recorded declines ranging between 26 percent and 66 percent.

However, Prabhu Insurance was the only company to register growth, with profits rising by 5.63 percent to NPR 211.5 million.

Industry Impact of Disasters

Insurance companies say the sharp rise in claims due to large-scale property damage from protests and natural disasters has had a direct impact on their financial performance.

Executives note that while underwriting performance remains stable in normal conditions, extraordinary claim events such as political unrest and floods significantly affect quarterly profitability.

The sector’s overall performance highlights the vulnerability of Nepal’s insurance industry to climate-related disasters and sudden socio-political disruptions, both of which have become more frequent in recent years.