Nepal Reinsurance plans to increase business with Indian and other foreign insurance companies after strengthening its capital base.
The reinsurer currently has a paid-up capital of NPR5 billion. It is now in the process of making a NPR1.28 billion initial public offering as part of its plans to increase its capital base to NPR8 billion. The company is allotting 16% of its shares at NPR100 apiece to the general people, reports The Kathmandu Post.
The company wants to diversify its business portfolio and enter new areas including the aviation sector,
Of its total insurance portfolio of NPR4 billion ($36.4 million), Nepal Re received business worth NPR500 million from Indian insurers. Nepal Re CEO Chirayu Bhandari said the reinsurer aims to expand business with Indian insurance companies to NPR2 billion in the next fiscal year. Currently, the company reinsures the insurance policies of six Indian insurers.
The company has business with insurers in 28 countries. Apart from India, these countries include the Maldives, Bahrain, Pakistan, the Philippines and a number of African countries. Most of the policies reinsured are fire, assets and engineering policies.
Overall, the company reinsures marine, automobile, fire and engineering insurance policies. Mr Bhandari said the company would start reinsuring aviation insurance policies soon.
In the Budget statement for the fiscal year starting 16 July 2018, the government asked Nepali insurers to reinsure at least 20% of their policies with domestic reinsurance companies. This is expected to help Nepal Re expand its business in the domestic market.