Risk and Insurance Protection

Insurance awareness has also increased due to the new plan of the insurance company, network of agents and branches, programs of the Nepal Insurance Authority with the local government, regular discussions through the media etc.

Nepal's insurance companies have contributed significantly to the overall economy through their services directly and indirectly. In the last fiscal year, the insurance company collected 182 billion in insurance fees, paid 82 billion in claims to 417,332 customers, contributed about 15 billion in direct and indirect taxes, contributed 3.4 percent to GDP, and the density of insurance was 6008 per person. Similarly, the total investment is about 7 billion, about 44 percent of life insurance access, about 3 lakh employees and agents have been provided employment.

With various types of risks including Russia-Ukraine, wars in the Middle East, which have increased globally, the insurance plan has also been diversified based on that risk. In developing countries including Nepal, customers prefer savings and investment life insurance plans, while in developed countries, risk protection plans are in vogue. We do not have auto insurance for essential risks like health insurance, vehicle insurance and property insurance like in developed countries.

Insurance services are recognized worldwide as an important tool for poverty alleviation and compensation. It is considered as an important means of reducing corruption in developed countries. It is ascertained whether the person sitting in an important position is adequately insured for future financial risks and needs including treatment. In this way, it is believed that the incumbents who are insured for the future will not take advantage by misusing their position. Insurance business is considered as a backbone in building the economy of the state. Life insurance companies have played an important role in building the base capital of the country's development by collecting the savings in the villages through agents.

As the main distribution system of insurance business expansion in developed countries, bank insurance, brokers, direct sales, online sales and institutional agencies have the main role, but in developing countries including Nepal, the role of individual agents in life insurance and direct sales in non-life insurance is the main role. Even in Nepal, more than 90 percent of life insurance business is done through agents (agency channel). In such a large part of the business, self-employment and the backbone of contributory insurance, the profession, efficiency and competence of the agent, along with professionalism, are often discussed. Along with the overall evaluation of the agency's contribution, the ethical and professional questions raised by representative incidents in this area have also affected the concept of the agent profession.

During this period, there was a significant expansion, achievement, and discussion about insurance, but there was also a controversial situation. The government's health insurance program with social security has played an important role in developing awareness by raising questions about quality services and the term insurance. Even with compulsory insurance when going for foreign employment, insurance has reached every household in Nepal compared to other countries in South Asia. However, the new use of insurance in an epidemic like Corona has been controversial until now and has become very expensive for the Nepali insurance market. Japan, Thailand and other countries also started as a test, but based on experience in a short period of time, the company modified and closed it, so it did not have to face the situation of conflict and huge financial liability like Nepal. The lessons learned from such practices that deviate from the basic principles of insurance are often costly and instructive for the future. For this, the companies have already paid about 5 billion and about 10 billion are yet to be paid. The dispute over the management and payment of agricultural insurance subsidy has not been resolved for a long time. Even though there are disputes over the payment of Corona, agricultural insurance and some sporadic insurance claims, overall, the annual payment of 82 billion by the insurance company to more than 400,000 customers has also made significant progress in the expansion and trust in insurance. Meanwhile, the implementation of the new Insurance Act 2079, the issuance of an insurance policy by the government, the formation of a high-level committee for the insurance of government property, etc., also seem to have improved the priority of the government in the insurance sector. It is clear that this decade has become a historic one for the insurance sector.

There is a need to work extensively on public awareness of the main topic of insurance. The basic issue of the difference in public awareness and understanding about insurance risk in us is the socio-economic situation. Until a few decades ago, the topic of risk transfer to a large population based on agriculture was limited to self-sufficiency. The situation of family structure is also a situation where society has developed from the environment of living in joint families and taking risks together. Rather than transferring risk, it is our behavior to take it for granted, ignore or ignore it. We have to bring about a change in the practice of using our own assets for future financial risks and losses. The structure of the family is gradually changing. Proper transfer of risk from joint family to single family is the only way to stay and in case of risk.

The next destination

To reduce the gap in access to insurance, public awareness should be increased from the primary level. For this, the insurance course should be included from the student level. It will have to be expanded to end the situation of paying compensation from the state fund by bearing the potential risk through insurance. With the merger and capital increase of insurance companies, it seems that the service should be enhanced in such a way that the customers feel the strength in the overall capacity of the company.

The plan we sell today was in vogue 70 years ago in developed countries including Japan. Now they have moved forward from risk-based planning and introduced plans of a preventive nature. We need to diversify the current system of insurance sales and make it customer friendly and technology oriented. The use of technology in the preparation of insurance plans, in the selection and development of human resources, in insurance awareness, in insurance marketing and distribution systems, insurance issuance and customer service will have to reduce the cost of insurance and make the service effective. Arrangements should be made so that customers can easily purchase insurance policies and receive services including claim payments through online technology.

Nepal's insurance companies have contributed significantly to the overall economy through their services directly and indirectly. In the last fiscal year, the insurance company collected 182 billion in insurance fees, paid 82 billion in claims to 417,332 customers, contributed about 15 billion in direct and indirect taxes, contributed 3.4 percent to GDP, and the density of insurance was 6008 per person. Similarly, the total investment is about 7 billion, about 44 percent of life insurance access, about 3 lakh employees and agents have been provided employment.0

Nepal's insurance companies have contributed significantly to the overall economy through their services directly and indirectly. In the last fiscal year, the insurance company collected 182 billion in insurance fees, paid 82 billion in claims to 417,332 customers, contributed about 15 billion in direct and indirect taxes, contributed 3.4 percent to GDP, and the density of insurance was 6008 per person. Similarly, the total investment is about 7 billion, about 44 percent of life insurance access, about 3 lakh employees and agents have been provided employment.1

Nepal's insurance companies have contributed significantly to the overall economy through their services directly and indirectly. In the last fiscal year, the insurance company collected 182 billion in insurance fees, paid 82 billion in claims to 417,332 customers, contributed about 15 billion in direct and indirect taxes, contributed 3.4 percent to GDP, and the density of insurance was 6008 per person. Similarly, the total investment is about 7 billion, about 44 percent of life insurance access, about 3 lakh employees and agents have been provided employment.2

Nepal's insurance companies have contributed significantly to the overall economy through their services directly and indirectly. In the last fiscal year, the insurance company collected 182 billion in insurance fees, paid 82 billion in claims to 417,332 customers, contributed about 15 billion in direct and indirect taxes, contributed 3.4 percent to GDP, and the density of insurance was 6008 per person. Similarly, the total investment is about 7 billion, about 44 percent of life insurance access, about 3 lakh employees and agents have been provided employment.3