Proposed reinsurance company will help strengthen relationships with Indian reinsurers: Roy
Insurance Board is planning to open the reinsurance company in the country to retain the foreign exchange that the insurance companies have been paying to the foreign reinsurance companies.
“It is a very welcome move that the Nepal market has taken an initiative of opening of its own reinsurance company,” according to General Insurance Corporation of India chairman Ashok K Roy.
“It will in fact help us in further having strong relations with Nepal market,” said the chairman-cum-managing director, who is leading the team GIC Re, that is one of the leading global reinsurers.
“We have quite an old relationship with Nepal market,” he said, adding that his company has been providing the reinsurance support for Nepal market. “We are exploring the possibility of how this market is further developed, and the insurance benefit reaches to the public at large.”
Roy had been visiting Nepal regularly to re-strengthen the relations between Nepali Insurance industry and GIC Re.
He also held meeting with Insurance Board chairman Prof Dr Fatta Bahadur KC and various industry players.
“Basically each country in the world is going for opening a reinsurance company of its own and it has got various positive points too,” he explained. “It helps the country to retain a larger portion of foreign exchange in the country, which then helps it further growth of the economy.”
The Insurance Board is planning to include the current Insurance Pool in the proposed Reinsurance company that will be a public company.
Likewise, Roy has also offered a strategic partnership with Nepal, for exchange of technical knowledge and underwriting skills for a period of about three years.
As the entire Asian region is growing at a fast pace, and there is no reason why Nepal market should not grow, he added. “Nepal insurance market is also going to grow like Indian or Chinese market,’ Roy opined, adding that there is a huge potential to grow as the country has just started micro-insurance, livestock, and crops insurance that gives an opportunities for further growth in the future. “The penetration rate of insurance is also very low in Nepal.”
Around 90 per cent of the total population in the country is living without insurance, according to Insurance Board that has revealed that the total number of life insurance policies issued stood at 320,531, making the coverage rate less than two per cent of the total population, by the end of the last fiscal year 2012-13.
The insurance companies have also failed to reach the people and make them understand the benefit of importance of insurance that protect lives against unseen calamities.
“Insurance companies have more potential to grow as its penetration needs to be increased,” said chief executive of Sagarmatha Insurance K B Basnyat. “Awareness is key to increase the insurance market.”