1. 1. What is insurance?

Insurance is the risk transfer mechanism between the insured and insurance company.
An arrangement by which a company or the state undertakes to provide a guarantee of compensation for specified loss, damage, illness, or death in return for payment of a specified premium.

1. 1. Why do we do insurance?

Some of the main reasons why insurance is important are:

1. 1. • Financial Security
      • Transfer of risk
      • Peace of mind
      • Some insurance policies are mandatory eg. Third party liability
      • Helps to reduce financial burden
      • Insurance keeps commerce moving
   2. What is Life Insurance Business?

As per Insurance Act of Nepal, “Life Insurance Business” means the business relating to a contract regarding to the life of any person under which he/she or his/her heir in the event of his/her death, will be paid a particular amount in case a specified amount is paid in installment on the basis of his/her age.

1. 1. What is Non- Life Insurance Business?

As per Insurance Act of Nepal, Non-Life Insurance Business” means other Insurance Business other than the Life Insurance Business

1. 1. Types of Insurance Companies in Nepal

There are two types of insurance companies in Nepal.

1. 1. • Life Insurance Company
      • Non-life Insurance Company
   2. Number of Life and Non-Life Companies in Nepal

There are 19 Life insurance and 20 non-life insurance companies in nepal.

Name of Life Insurance companies	Name of Non-life Insurance companies
American Life Insurance Company Limited (MetLife)	Ajod Insurance Company Limited
Asian Life Insurance Company Limited	Everest Insurance Company Limited
Citizen Life Insurance Company Limited	General Insurance Company Nepal Limited
Gurans Life Insurance Company Limited	IME General Insurance Company Limited
I.M.E. Life Insurance Company Limited	Himalayan General Insurance Company Limited
Jyoti Life Insurance Company Limited	Lumbini General Insurance Company Limited
Life Insurance Corporation (Nepal) Limited	National Insurance Company Limited
Mahalaxmi Life Insurance Company Limited	Neco Insurance Company Limited
National Life Insurance Company Limited	Nepal Insurance Company Limited
Nepal Life Insurance Company Limited	NLG Insurance Company Limited
Prabhu Life Insurance Company Limited	Oriental Insurance Company Limited
Prime Life Insurance Company Limited	Prabhu Insurance Company Limited
Rastriya Beema Sansthan	Premier Insurance Company (Nepal) Limited
Reliable Nepal Life Insurance Limited	Prudential Insurance Company Limited
Reliance Life Insurance Limited	Rastriya Beema Company Limited
Sanima Life Insurance Company Limited	Sagarmatha Insurance Company Limited
Sun Nepal Life Insurance Company Limited	Sanima General Insurance Company Limited
Surya Life Insurance Company Limited	Shikhar Insurance Company Limited
Union Life Insurance Company Limited	Siddartha Insurance Company Limited
	United Insurance Company (Nepal) Limited

 

1. 1. Types business done by Life and Non-life Insurance comapnies.

As per the Insurance Regulation, 1993 A.D, Non-Life Insurance companies can do following businesses:

1. 1. 1. Fire Insurance,
      2. Motor Insurance,
      3. Marine Insurance,
      4. Engineering and Contractor’s Risk Insurance,
      5. Aviation Insurance,
      6. Miscellaneous Insurance

As per the Insurance Regulation, 1993 A.D, Life Insurance companies can do following businesses:

1. 1. 1. Whole Life Insurance,
      2. Endowment Life Insurance,
      3. Term Life Insurance.
   2. What is Premium?

Premium means the Insurance Premium to be collected by the Insurer from the insured in consideration of the Insurance Business.

1. 1. What is reinsurance?

Reinsurance is re-insuring the portion of the risk which is excess of the risk to be hold by the Insurer.
Reinsurance is a process whereby reinsurer takes on all or part of the risk covered under a policy issued by an insurance company in consideration of a premium payment. In other words, it is a form of an insurance cover for insurance companies.

1. 1. What is reinsurer?

A company which insures an insurance company is known as reinsurer. Reinsurance companies are reinsurers.

1. 1. Why do we need reinsurance?

• To Increase Underwriting Capacity
• Risk Capital Improvement and Diversification
• Surplus Relief
• Catastrophic Protection
• To Finance New Business
• Growth in Economy
• Job Creation

• What is retrocession?

 

Retrocession is re-insuring the portion of the risk which is excess of the risk to be hold by the reinsurer.

• How does reinsurance work?

 

Insured takes the policy from insurance market through insurers, then insurers goes to reinsurance market to get reinsurance from reinsurers. Reinsurers with the help of reinsurer intermediary goes to the market with retrocession with the retrocessionaire.

• Types of Reinsurance

 

• Types of treaty

 

There are two types of treaty.

• Proportional
• Non-proportional

• What is proportional treaty?

 

A proportional reinsurance agreement, also known as “Pro Rata” reinsurance, obligates the reinsurer to share a percentage of the losses. The reinsurer receives a prorated share of the insurer’s premiums.

• What is non-proportional treaty?

 

Non-proportional reinsurance, or excess of loss basis, is based on loss retention. The ceding insurer agrees to accept all losses up a predetermined level. The reinsurer agrees to reimburse the ceding insurer for losses above the predetermined level and up to the reimbursement limit provided for in contact.

• Is Nepal Reinsurance company only Reinsurance company in Nepal?

 

Yes.

• Under which Ministry does Nepal Reinsurance company fall under?

 

Ministry of Finance.

• Who is the regulatory body of Nepal Reinsurance Company?

 

Beema Samiti.

• Where is Nepal reinsurance company Located?

 

5th floor, Central Business Park, Thapathali, Kathmandu, Nepal

• When was Nepal reinsurance company established?

 

2071 B.S.

• What are the opportunies for Nepal reinsurance in the market?

 

• Economic growth potential
• Social welfare schemes
• Demand for financial solutions
• Demand for reinsurance expertise, service and knowledge transfer
• Technological leaps,
• Increase in Annual Premium Revenue,
• Impart of Knowledge & Capacity Development,
• FOREX Saving & Incoming Remittance,
• Increment of Premium Retention (both Ceding and Re)

• Does Nepal Re do business in international market?

 

Yes. It does the retro cession and also accepts the international treaty and facultative business.

• What are the types of services provided by NepalRe?

 

Nepal Re provides the services for facultatve and treaty reinsurance for fire, property, engineering, aviation, marine, agriculture, miscellaneous and motor portfolios along with different kind of pools such as covid, RSDMDST etc.