Kathmandu. Trust Micro Insurance, which is preparing for the public offering (IPO) of ordinary shares, has received a ‘double B minus’ rating.
Rating agency Infomerics Credding Rating Nepal has given ‘Double B minus’ index to Trust Micro Insurance. The company receiving this assessment is considered to have moderate risk of default risk in terms of timely service of financial liability.
The regulator is at risk due to intense competition from the highly regulated insurance sector as well as three other small non-life companies and the 14 largest general non-life insurers that provide the same micro insurance products as part of the company’s broader portfolio. In addition, the regulatory provisions of the Nepal Insurance Authority and in particular the limit of insurance amount up to Rs 5 million per policy are expected to limit the possibility of growth in the near future.
The company has so far introduced 13 types of insurance policies. The company has been providing micro insurance services through 33 branches across the country.
The Insurance Authority has fixed the minimum paid-up capital of the small insurance company at Rs 750 million. At present, the founding group has an investment of Rs 525 million in the company. The company will raise Rs 225 million through the IPO.
The company has not yet applied to the Securities Board of Nepal to bring the IPO.
