Kathmandu. The history of Nepal’s insurance sector is almost eight decades long. Insurance has been formally started in Nepal in 2004 BS with the establishment of ‘Nepal TAG_OPEN_em_29 Freight and Insurance Company Limited’ .
The company has been in existence for 78 years. This company has been working as a non-life insurer since 2016 B.S. ‘Nepal Insurance & Transport Company Limited’ } and Nepal Insurance Company Limited in 2048 B.S.
The Insurance Regulatory Board was born soon after the introduction of insurance services in Nepal. 21 years after the establishment of the first insurance company, i.e. It was established on May 1, 2025 BS.
Based on the historical calculation of the past years, Nepal’s insurance industry has not reached the maturity stage even after a long period. However, comparing the general expectations of the insurance sector with the regulatory effectiveness of the insurance regulator shows that the left is still on the move.
With the increasing use of technology, insurance requirements are changing. Insured expectations are also changing. Consumers have started comparing the services of insurance companies with the inmotive financial services being provided by the banking sector and digital payment service providers. In this way, there are many complaints of the insured or service recipients with the insurance sector when comparing the two different sectors on the basis of technology and service.
Here are some of the reforms that the insurance regulator of Nepal, the Nepal Insurance Authority (NEA), and the insurance service providers (ISPs) should take into account the short-term and long-term needs.
Use of technology {{TAG_CLOSE_b_35 TAG_OPEN_b_35}}: The service experience of the insured should be improved by using technology such as digital platforms, mobile apps, online insurance management etc. Some insurers have provided the facility of taking insurance loan through digital means. But how long are they waiting for? Investing without finding the answer has not yielded the expected results. Life insurance companies are still not as generous as compared to non-life insurers in online insurance management. Life insurance companies have not created an environment where the insured can get a digital policy.
Agent Empowerment: The role of an agent in the insurance distribution network in Nepal is very important and sensitive. There is an acute lack of professional knowledge and experience among insurance agents in such an important and sensitive responsibility. If you don’t have knowledge about insurance yourself, you can expect the insured to know how to advise them on the right financial advice.
The Professional Insurance Agents Association seems to be active only for conventions and leadership elections like the sister organizations of political parties. In the past, there has been no initiative to provide training opportunities to member agents. Experienced and experienced agents from all over the country are involved in this organization. The prestige of the organization will also increase the prestige of the organization by bringing in those who are not associated with the organization as honorary members or advisors. In collaboration with the Insurance Authority and the Insurance Association, the Professional Agents Association can take the lead in the training by selecting resource persons from all over the country and preparing an annual schedule.
On the other hand, the insurer should not hesitate to invest in the business efficiency of the agent. They should be given the opportunity for regular residential training (purely training) and future training programs should be determined on the basis of the measure of professional achievement that will be achieved.
Insurance Awareness: In Nepal, access to insurance has reached 49 percent, which is calculated by comparing the number of micro-temporary and mandatory foreign employment periods issued for the protection of loans sold by insurers. But the reality is different. Most of the citizens are still not informed and educated about insurance. Most of them are completely unaware of the terms and conditions of insurance. This is the reason why they develop a negative attitude towards the insurance company at the time of claim payment.
The Insurance Authority of Nepal (NIA) should mandatorily conduct awareness programs through the insurers to increase the understanding of insurance among the general public. It seems that a certain percentage of the amount under the Corporate Social Responsibility Fund of the insurer will have to be compulsorily spent on insurance awareness for the next few years, and only then will awareness be possible at a measurable level.
{{TAG_OPEN_b_32}Regulation and Transparency: As a regulatory body, the Nepal Insurance Authority (NEA) should make policy and structural reforms and initiatives to increase transparency and professionalism in the insurance sector by making maximum use of the powers given by the Insurance Act 2079 and Regulation 2081.
Competition: The insurance sector should be improved by encouraging healthy competition among insurance companies. For this, the use of technology can be an ideal option to curb the potential for unhealthy competition between companies. On the other hand, the Authority should immediately take action against the insurers involved in unhealthy and unprofessional practices by using the service recipient as an indicator.
Insured Service}: Insurance companies should strengthen trust by providing quick and easy facilities to the insured and other customers. The insurance company should train the insured on how to pay the renewal insurance premium from the comfort of home. The paperwork process should be facilitated to eliminate the compulsion to visit the insurer’s office again and again for insurance related services. If the insured updates the identity of the insured before the time of claim payment, the insured does not have to face much paperwork at the time of claim payment. The insured should be updated with all the information related to their insurance policy through phone, SMS and email.
