Kathmandu. Credit rating agency ICRA Nepal has placed Nepal Reinsurance and 5 non-life insurers in the watch with negative application watch list.
The rating agency said that it is closely monitoring the insurance companies that have been given ratings in the backdrop of the protests on September 23 and 24 and the political developments and destruction that have developed since then.
Shikhar Insurance, Sagarmatha Lumbini Insurance, Siddhartha Premier Insurance, NLG Insurance, and United Ajod Insurance have also been included in the list. Out of 14 licensed non-life insurers, 5 have credit rating and issue rating of one out of two reinsurers.
In a statement, the rating agency said, “Nepal has recently seen a major change in the political scenario. There has been a change in the political leadership in the mass protests against the ruling government. The protests were accompanied by extensive damage to public infrastructure. However, some private businesses were also affected. ’
ICRA Nepal’s valuation has been placed on the list of regular monitoring as part of its obligations to lenders. This can affect the financial condition of the assessed organization.
According to ICRA Nepal’s preliminary assessment, the losses incurred by the recent events are likely to have a major impact on the non-life insurance sector (including domestic reinsurance companies). Since most of these risks are transferred through reinsurance arrangements, the financial impact is relatively small. ICRA Nepal has rated the following actuaries on the ‘Negative Impact Watch List’ denoted by the symbol ‘@’1’.
The rating agency said it will continue to monitor the impact on the financial condition of the insurer and will revise the valuation decision. ICRA said that the rating of the watchlist companies indicated by the ‘@’1 symbol is likely to decline further.
