Insurance claims in Nepal soar to NPR 9.5 bn following October floods and landslides

KATHMANDU: In the wake of devastating floods and landslides that hit Nepal in early October, insurance claims have surged to an estimated NPR 9.5 billion, according to the latest data from the Nepal Insurance Authority. This sum represents thousands of claims filed between October 10 and November 6, reflecting the extensive losses endured by individuals and businesses across affected regions. As of the latest report, the number of claims has reached 3,306, amounting to NPR 9.54 billion, with property insurance bearing the bulk of the claims at NPR 7.31 billion. Engineering and contractor risk insurance claims stand at NPR 1.74 billion, while remaining claims span categories such as private motor, public motor, marine, crop, livestock, and miscellaneous insurance.

Despite the enormous volume of claims filed, actual payouts have so far been relatively modest. The Insurance Authority reports that only NPR 303.6 million, or around 3% of the total claims, has been disbursed across 261 cases. While the Nepal Insurance Authority has issued directives to expedite the processing of these claims, many are still awaiting settlement. Surya Prasad Silwal, the Authority’s Chairman, emphasized that swift support is critical in such a crisis and has suggested temporary adjustments to the claim requirements to speed up the process, including waiving typically required documents like police reports and agency endorsements.

To ensure faster response times, the Authority has also asked insurance companies to reduce the list of required documents and directed surveyors to adhere strictly to submission timelines. Furthermore, given the widespread destruction caused by the natural disasters, the Authority is prepared for an increase in claims over the coming months and has advised companies to account for potential cases where policy documents may have been lost or damaged.

Regional and Sectoral Breakdown of Claims

The distribution of claims reveals that Bagmati Province has been hit hardest, registering the most significant volume of insurance claims and payouts. To date, 2,910 claims have been filed in this province alone, accounting for NPR 8.92 billion in claims. Among these, NPR 291.7 million has been paid across 242 cases. Koshi Province ranks second in terms of claim volumes, with 228 claims totaling approximately NPR 336.2 million. In Koshi, NPR 7.62 million has been paid out so far for nine of the claims.

In Madhesh Province, the total claim amount stands at NPR 140 million across 94 claims, with NPR 2.19 million disbursed for eight cases. Lumbini Province has seen 43 claims totaling NPR 90 million, though only NPR 2.08 million has been settled. Meanwhile, Gandaki Province, with 27 claims totaling NPR 54.8 million, is still awaiting its first payout.

Karnali and Sudurpaschim Provinces reported a comparatively lower volume of claims, with two claims each. As of last Tuesday, Karnali has yet to disburse any payments, while Sudurpaschim recorded a small payout of NPR 9,100 for one claim.

Policy Adjustments for Speedier Claims Processing

In a move to facilitate quicker processing, the Insurance Authority has adjusted certain requirements given the unique circumstances following the disaster. Typically mandatory documents, such as police reports and specific endorsements, may be waived for claimants under current guidance. The Authority has instructed insurance companies to simplify the documentation process and shorten the required paperwork, aiming to relieve claimants who may be struggling to obtain all necessary documents amid the chaos caused by the flooding and landslides.

The Authority’s Chairman Silwal also noted the challenges posed by the surge in claims, especially considering the geographic spread of the affected areas. “Given the extraordinary situation, claim processing timelines will be adjusted, and insurance companies have been advised to treat these cases with high priority to facilitate relief to those impacted.”

To further streamline the process, surveyors are expected to submit their reports promptly within the designated timeframes, and the Authority has underlined that insurance companies must ensure that assessment and payment processes are accelerated in line with recent directives.

The Path Ahead for Insurance Relief

The Insurance Authority’s data shows that private motor insurance, a category severely impacted by the floods, saw 838 claims, while public motor insurance recorded 338 claims. Within these sectors, Bagmati Province leads in terms of both claims filed and payouts made, followed closely by Koshi Province.

The Nepal Insurance Authority has highlighted that, although these figures reflect a significant financial burden, expediting payouts remains a top priority. As claims continue to accumulate, officials have pledged to maintain close coordination with insurance companies to ensure the rapid delivery of funds to those affected. This coordinated response underscores the Authority’s commitment to providing prompt support to disaster-stricken communities, enabling them to recover from the financial strain of October’s floods and landslides.