Kathmandu. Care Ratings Nepal, a credit rating agency, has continued the ‘issuer’ rating of IME Life Insurance.
Compared to the previous fiscal year, the last fiscal year 2080. Care Ratings Nepal has continued the rating with positive growth in most of the financial indicators of insurance in 81.
In the fiscal year 2080/81, the total earned insurance premium has increased by 13 percent. During this period, the company earned Rs 4.74 billion in insurance premiums. This growth of the company has been supported by a 15 percent increase in first year insurance and 14 percent increase in renewal insurance fee. During the same period, the average growth of the insurance sector has been only 10 percent.
Increased agent network, digital sales of insurance policies and controlled spending ratio have led to an increase in insurance revenue. In the fiscal year 2080/81, the insured ratio was limited to 7.96 percent.
Similarly, the net earned insurance premium increased by 15 percent to Rs 4.53 billion. The company’s retention ratio remains stable at 96 percent. That is, 97 percent of the policies issued in the first year have been renewed.
The company’s net claim payments were controlled at Rs 1.16 billion, bringing the loss ratio down to 25.64 per cent. It was 27.89 percent in the previous year.
In addition, the reduction in commission expenditure has also improved the commission ratio and expenditure ratio. These ratios have come down to 9.29 per cent and 11.75 per cent, respectively. In the previous year, it was 11.75 percent and 16.17 percent respectively.
Due to all these improvements, the net underwriting result has increased by 19 percent to Rs 2.08 billion. The company’s investment income also increased by 62 percent to Rs 1.31 billion.
The profit before tax of the insurance company has increased to Rs 642 million. Last year, it was Rs 219 million. This increase is due to the return to the life insurance fund and improvement in the overall financial performance of the company.
Similarly, the current fiscal year 2081. Even in the first nine months of 2018- 1982, the company’s total earned insurance premium surged 13 per cent to Rs 3.73 billion, which is in line with the average growth of the insurance sector. Net earned insurance premium surged 16 percent to Rs 3.60 billion.
During this period, the net underwriting result has reached Rs 1.82 billion. The return on investment increased by 14 percent to Rs 1.09 billion. This has helped increase the company’s net profit to Rs 366 million.
Care Ratings points out the risks posed by fierce competition among life insurers, limited market share (3.04 per cent) and changes in regulatory provisions as a challenge for IME Life.
