Kathmandu. Credit rating agency, ICRA Nepal has removed NLG Insurance Company Limited from Issue Rating A (ICRANP-IR A-). The review indicates that uncertainty about the company’s ability to meet its financial obligations on time has been removed.
According to ICRA Nepal, the current data shows that NLG Insurance will be able to withstand the impact of the claims arising out of the agitation on September 23 and 24 and the floods and landslides in September. Out of the claims of about Rs 64.30 crore related to the agitation, the company’s share of its liabilities is only about Rs 15.20 crore. Similarly, ICRA Nepal has claimed about Rs 734 million from floods and landslides, but the company’s direct liability is only about Rs 20 million.
ICRA Nepal is rated that these liabilities are easily manageable due to strong reinsurance provisions and adequate liquidity. These incidents occurred in the current fiscal year 2082. The company’s profit at 83 will be under pressure, especially in the first quarter.
The rating also cited NLG Insurance’s long experience, 50% ownership of National Life Insurance Company Limited, and an experienced management team as positive aspects. The solvency ratio of the company is around 342 percent. That’s more than three times the regulatory minimum of 130 percent. ICRA Nepal Limited has further strengthened its financial position after it reached the minimum capital by issuing around 63% right shares in January 2025.
However, there are challenges such as intense competition among non-life insurers, mid-sized business size, high dependence on motor insurance, and shrinking return on investment.
ICRA Nepal in a rating statement said that the effectiveness of NLG Insurance in the coming days will determine the company’s future financial position in terms of its ability to expand, improve risk assessment, diversify investments and strengthen its position in a competitive market.
