Insurance companies pay nearly Rs 93 billion in claims in 11 months, Rs 49.44 billion still outstanding

KATHMANDU: Nepal’s insurance industry paid out nearly Rs 93 billion in insurance claims during the first 11 months of the current fiscal year 2025/26 (FY 2082/83), reflecting a significant increase in compensation to policyholders. However, insurers still have Rs 49.44 billion worth of claims awaiting settlement, according to the latest data released by the Nepal Insurance Authority.

The Insurance Snapshot published by the regulator shows that life and non-life insurance companies collectively settled Rs 92.97 billion in claims between Shrawan and Jestha, marking a 27.37 percent increase compared to the Rs 72.94 billion paid during the corresponding period of the previous fiscal year.

The sharp rise in claim payments highlights growing insurance penetration and increasing claim settlements across Nepal’s insurance market, although the substantial backlog of unpaid claims continues to raise concerns over settlement efficiency, particularly among non-life insurers.

Life insurers account for majority of claim payments

Life insurance companies remained the largest contributors to claim settlements during the review period.

According to the Nepal Insurance Authority, life insurers paid Rs 66.41 billion against 265,204 insurance claims by the end of Jestha.

During the same period last fiscal year, life insurers had settled 238,608 claims worth Rs 52.64 billion.

This indicates that the number of life insurance claims settled increased by 11.15 percent, while the value of claim payments rose by 26.17 percent year-on-year, reflecting higher policy maturity payments, death benefits and other insurance payouts.

Non-life insurance claims jump over 30 percent

The non-life insurance segment also recorded robust growth in claim settlements.

General insurance companies paid Rs 26.56 billion against 140,351 claims during the first 11 months of the current fiscal year.

In the corresponding period of the previous fiscal year, non-life insurers had settled 127,282 claims worth Rs 20.30 billion.

Compared to last year, the number of non-life claims increased by 10.27 percent, while the value of claims paid surged by 30.84 percent, indicating rising compensation related to motor insurance, property insurance, engineering risks, health insurance and other general insurance products.

Nearly Rs 50 billion in claims still unpaid

Despite the increase in settlements, insurers still have a significant volume of pending claims.

The Nepal Insurance Authority reported that as of the end of Jestha, insurance companies had Rs 49.44 billion worth of claims yet to be paid.

Of the total outstanding amount:

• Life insurance companies have pending claims worth Rs 5.54 billion relating to 60,954 claims.
• Non-life insurance companies account for Rs 43.89 billion in pending claims involving 117,182 claims.

The figures show that nearly 89 percent of all outstanding claim liabilities belong to the non-life insurance sector.

Pending life insurance claims continue to rise

Life insurers’ unpaid claims have also increased compared to the previous fiscal year.

At the end of Jestha last year, life insurers had 54,422 pending claims worth Rs 4.57 billion.

This means that during the current fiscal year:

• Pending life insurance claims increased by 12 percent.
• The outstanding claim amount rose by 21.12 percent.

Although life insurers continue to settle the majority of claims promptly, the increase in pending cases suggests a growing workload alongside expanding insurance coverage.

Non-life insurers face mounting backlog

The backlog is even more pronounced among non-life insurance companies.

As of the end of Jestha, non-life insurers had 117,182 pending claims valued at Rs 43.89 billion.

In comparison, during the same period last year, they had 106,757 outstanding claims worth Rs 30.46 billion.

This represents:

• A 9.77 percent increase in the number of pending claims.
• A substantial 44.10 percent rise in the value of unpaid claims.

The sharp increase indicates growing financial liabilities within the non-life insurance sector, which typically handles high-value claims arising from vehicle accidents, industrial losses, natural disasters, fire incidents and health insurance.

Industry witnessing both expansion and rising liabilities

The latest data suggest that Nepal’s insurance industry continues to expand, with higher premium collections translating into increased claim payments across both life and non-life segments.

However, the simultaneous rise in outstanding claims highlights the need for insurers to strengthen claims management systems and improve settlement efficiency.

Industry observers note that timely claim settlement remains one of the most important indicators of customer confidence and operational performance in the insurance sector. As insurance penetration increases and policyholders become more aware of their rights, insurers are expected to process claims more quickly while maintaining prudent financial management.

The latest figures indicate that while Nepal’s insurers have significantly increased payouts during the current fiscal year, clearing the growing backlog of nearly Rs 50 billion in outstanding claims will remain a key challenge for the industry in the coming months.