Asian News - Nepal: Local reinsurer clinches South Asian deals
Source: Asia Insurance Review | Apr 2016
The Nepal Reinsurance Company, the only local reinsurer, has signed its first contracts with South Asian clients. The deals are with two foreign insurance companies, one each from Bhutan and Afghanistan.
The first agreement was signed in October 2015 and the other in November 2015, reported the Kathmandu Post.
Mr Chirayu Bhandari, CEO of Nepal Re said that the Bhutan business was from Bhutan Insurance Company, from which Nepal Re received premiums of NPR15 million (US$140,000). While the reinsurer obtained premiums of NPR10 million from the Afghan insurer. Nepal Re covers risks related to marine, automobile and fire, among others, in the two countries.
“Due to the high terrorism risk in Afghanistan, we have not covered losses that could arise due to terrorism activities,” said Mr Bhandari. “We conducted a three-year risk analysis before accepting premiums from the insurer.”
Plans to expand to other markets
Mr Bhandari said the company has adopted a strategy to expand its business in the South Asian Association for Regional Cooperation countries for a start. There are plans to expand to other markets later.
In the domestic market, Nepal Re has received premiums equivalent to 5% of the total non-life insurance business. “This amounts NPR500-550 million in total,” said Mr Bhandari. Nepal Re was formed in November 2014 from the conversion of the Insurance Pool that had been set up in 2003 to cover damages caused by terrorism amid a Maoist insurgency.