Kathmandu. The floods in Bhotekoshi have added another financial crisis to insurance companies, which have been making a balance sheet of losses without fully compensating them for the losses caused by last year’s Zenji agitation. <\/p>\n
It will take at least five years for both domestic insurers and reinsurers to recover from the damage caused by both unimaginable events and improve their financial strength. <\/p>\n
Nepal’s insurance companies have to pay a much higher price for the current disaster after the Government of Nepal and the Nepal Insurance Authority forcibly integrated the risk in the pretext of maintaining domestic reinsurance. <\/p>\n
Both the domestic reinsurers have been pushed into huge losses by not partially compensating for the Genji movement. According to the unrefined financial statements of the state-owned Nepal Reinsurance Company, the loss of the last fiscal year was Rs 5.84 billion. The amount of loss is more than 43.51 percent of the paid-up capital of Nepal Reinsurance. <\/p>\n
According to the unrevised financial statements, in the last financial year 2082. Himalayan Reinsurance has a loss of more than Rs 3.45 billion in 83 years. This amount is equivalent to 32.32 percent of the paid-up capital. <\/p>\n
During the Jenji agitation on September 23 and 24 last year, the insurance companies had to face huge compensation claims for looting of money, jewelry, and arson from commercial buildings, automobiles, hotels, private residences, industries, factories, warehouses and big markets, bank branches and ATM machines. Even before the Jenji agitation, the insurer had to face compensation after the floods swept away the bridges and the customs yard at Tatopani and Rasuwa checkpoints in July 2082. <\/p>\n
Before we could escape the floods of Bhotekoshi in Rasuwa, the Genji movement added another financial burden. This time, the floods have caused unimaginable damage to motor vehicles, hydropower projects, factories and commercial property. There is a risk that the insurance company will be financially ruined if it has to bear the compensation. <\/p>\n
The flooding in the Bhotekoshi River on Wednesday morning has damaged the infrastructure, industries, motor vehicles and buildings along the Bhotekoshi, Trishuli and Narayani rivers from Rasuwa to Chitwan. <\/p>\n
Nepal is at the top of the list of the most vulnerable countries in the world in terms of the impact of climate change. Here, the damage caused by earthquakes, floods, landslides, droughts or excessive rainfall can go beyond estimates at any time. <\/p>\n
The domestic insurer has filed a claim for compensation of only Rs 23.45 billion for the loss of property worth Rs 84 billion during the Jenji agitation last year. Out of this, Nepal Reinsurance Company has paid Rs 6.23 billion. Since the Nepal Reinsurance Company has borne all the risks through the Hooliganism and Terrorism Insurance Fund, the Nepal Reinsurance Company has to bear the majority of the losses of the Jenji Movement. <\/p>\n
The floods have swept away hundreds of vehicles and other imported goods, hydropower projects, individual houses, 9 branches of banks, and hundreds of cargo containers. <\/p>\n
Due to the floods, 12 hydropower projects and one solar project have been seriously damaged. Similarly, 15 more projects under construction have also been seriously damaged, according to the Nepal Electricity Authority. A total of 900 MW of projects that have already been in operation and are under construction have been damaged. <\/p>\n
A decade ago, the earthquake of April 12, 2015 caused a loss of Rs 900 billion, but the liabilities of the insurance companies were only about Rs 17 billion. <\/p>\n
Sushil Dev Subedi, executive director of the Insurance Authority, said that the Rasuwa floods are the biggest loss of life and property so far, which will affect life, non-life and reinsurance companies. Responding to a query by Insurance Khabar about the risk of domestic reinsurers, he said, “However, since the risk is shared with foreign reinsurers, all the losses should not be borne by the domestic insurer alone.” According to the reinsurance agreement, the share of the loss is shared with all the reinsurers. \u2019<\/p>\n
Claiming that the damage caused by the Rasuwa floods will not affect the insurers, Subedi said, “There may be some impact on the balance sheet of the company, but there will be no situation of the company collapsing.” \u2019<\/p>\n
Subedi said that the work of collecting data on the damage caused by the Rasuwa floods has already begun.<\/p>\n","protected":false},"excerpt":{"rendered":"
Kathmandu. The floods in Bhotekoshi have added another financial crisis to insurance companies, which have been making a balance sheet of losses without fully compensating them for the losses caused by last year’s Zenji agitation. It will take at least five years for both domestic insurers and reinsurers to recover from the damage caused by […]<\/p>\n","protected":false},"author":5,"featured_media":206532,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[45031,45159,45102],"tags":[],"class_list":["post-313902","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-banner-news-en","category-news-en","category-reinsurance-en"],"acf":[],"_links":{"self":[{"href":"https:\/\/insurancekhabar.com\/ikbrapi\/wp\/v2\/posts\/313902","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/insurancekhabar.com\/ikbrapi\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/insurancekhabar.com\/ikbrapi\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/insurancekhabar.com\/ikbrapi\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/insurancekhabar.com\/ikbrapi\/wp\/v2\/comments?post=313902"}],"version-history":[{"count":1,"href":"https:\/\/insurancekhabar.com\/ikbrapi\/wp\/v2\/posts\/313902\/revisions"}],"predecessor-version":[{"id":313903,"href":"https:\/\/insurancekhabar.com\/ikbrapi\/wp\/v2\/posts\/313902\/revisions\/313903"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/insurancekhabar.com\/ikbrapi\/wp\/v2\/media\/206532"}],"wp:attachment":[{"href":"https:\/\/insurancekhabar.com\/ikbrapi\/wp\/v2\/media?parent=313902"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/insurancekhabar.com\/ikbrapi\/wp\/v2\/categories?post=313902"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/insurancekhabar.com\/ikbrapi\/wp\/v2\/tags?post=313902"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}