First Business News Portal in English from Nepal
KATHMANDU: With the increasing number of coronavirus infections in the country, the number of people who have bought the COVID-19 insurance making claims has also risen significantly. Data made available by the Insurance Board reveals that a total of 1.51 million people have bought the coronavirus insurance and total premiums collected stand at Rs 870 million till October 9.
The country’s insurance board started the insurance service against COVID-19 through non-life insurance companies from April 19. However, things have not turned out so good for the insurance firms as they say that the amount being disbursed as claims is higher than the premiums collected so far. As a result, their liabilities are also rising.
According to data provided by the board, 8,469 insured people have made claims worth more than Rs 809.8 million. Insurance companies state that around 93 percent of the people who had bought the policy have made claims so far.
Among the 20 non-life insurance companies selling the policy, 13 companies have more claims than the amount collected as premium. Data shows that the number of claims of the remaining seven firms has also gone up from 56.74 percent to 98.93 percent.
The companies who have more claims to distribute than the premiums collected are NECO, United, Prabhu General, IME General, Himalaya, Oriental, Sanima General, Lumbini, NLG, Prudential, Everest, National and Nepal Insurance.
For instance, NECO Insurance collected premiums worth Rs 45.49 million till October 9 but it has received claims for Rs 75 million. Till date, it has paid claims worth Rs 16 million.
United Insurance is another such company whose claim amount is higher than the premiums it has collected. It has collected premiums worth Rs 18.45 million but its claims stand at a whopping Rs 42.50 million. It has already paid claims worth Rs 4.3 million so far.
Likewise, Prabhu Insurance that has collected premiums of Rs17.44 million has claims that stand at Rs31.6 million. It has till date paid claims worthRs4.3 million. Meanwhile, IME General Insurance also has been flooded with claims worth Rs 50 million whereas it has collected premiums worth Rs 36.43 million. So far, it has paid claims amounting to Rs 6.3 million.
Similarly, Himalayan Insurance has collected premiums amounting toRs37.69 million but has received claims for Rs 47.85 million. Till date, it has paid claims worth Rs 7.4 million. Oriental Insurance in the meantime has collected premiums of Rs 17.77 million while it has received claims for Rs 15.35 million. As per data, it has already paid claims worth Rs 2.45 million.
Sanima General Insurance is another company to have received claims that stand to be more than the premiums it has collected. It has recorded premium collection of Rs 11.32 million but has received claims of Rs 15.55 million. The company has paid claims worth Rs 750,000 till date.
Meanwhile, Lumbini Insurance that has collected premiums worth Rs 31.7 million has received claims of Rs 36.5 million. It has so far paid out Rs 5.25 million. NLG Insurance has also collected premiums of Rs 29.29 million but received claims of Rs 33.6 million. NLG has paid claims worth Rs 1.5 million.
Similarly, Prudential Insurance has also made premium collection of Rs10.97 million but has claims of Rs 15 million. The company has so far paid Rs 4.1 million to its clients. Everest Insurance has collected premiums worth Rs 24.32 million. However, it has received claims of Rs 27.5 million and has so far paid Rs 2.95 million.
Nepal Insurance, meanwhile, has received claims for Rs 27.5 million but it has collected premiums worth only Rs 19.92 million and has already paid claims worth Rs4.95 million. Likewise, National Insurance has collected premiums worth Rs 9.24 million while it has received claims amounting to Rs 9.4 million. The company has paid out Rs one million till date.
As per an agreement signed during the introduction of the COVID-19 Insurance Scheme, the liability of the claims is to be shared by the Ministry of Finance, the Insurance Board and Nepal Insurers’ Association. According to the agreement, claims of up to Rs one billion will be paid through the claim payment pool.
After that, the companies will pay the next Rs one billion through reinsurance and another Rs 500 million from their catastrophe fund. Similarly, the board will take responsibility for the next Rs one billion after liabilities touch Rs 2.5 billion. For liabilities of above Rs 2.5 billion the government will bear the responsibility.
The Insurance Board has informed that the working procedure of the COVID-19 Insurance Scheme announced by the government has been made on the basis of liability. According to this, the companies themselves should pay the claims as they received.
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