KATHMANDU: Earthquake related claim settlement of non-life insurance companies has been gradually improving in recent weeks, but the Insurance Board — the insurance sector regulatory authority — has said that their performance cannot be considered satisfactory. Status of claim settlement was disappointing at just 1.5 per cent of the total claims till the end of last month.
Till last Friday, a total of 16 operational non-life insurers had settled 1,605 — or 11.1 per cent — of the 14,458 claims, according to the Insurance Board. Claims amounting to Rs 13.84 billion have been filed so far of which claims worth only Rs 286.68 million have been settled.
As of last Friday, the highest number of claims was received by Sagarmatha Insurance (2,234), followed by Siddhartha Insurance (1,464) and Shikhar Insurance (1,344).
If Sagarmatha Insurance were to settle all the claims it needs to fork out Rs 1.30 billion. However, it has so far settled only 5.64 per cent of the claims and has
released a payment of just Rs 12.91 million.
Siddhartha Insurance, on the other hand, has settled 18.99 per cent of claims worth Rs 25.90 million, while Shikhar Insurance has settled 26.56 per cent of claims worth Rs 118.85 million. Shikhar Insurance is the best performer among the 16 non-life insurance companies.
Non-life insurers have claimed that delay in report submission by surveyors is hindering the claim settlement process. However, surveyors have said that they have submitted a significant number of reports till last Friday. Due to lack of licensed surveyors in the country, each of the 144 surveyors involved has been conducting more than 50 surveys.
There are only around 400 licensed surveyors in the country.
Earlier, IB officials had estimated the total earthquake-related losses of non-life insurers to stand at around Rs 20 billion. Of this amount, losses of Rs five billion to Rs six billion may have to be borne by the companies themselves and the rest by reinsurance companies located abroad, according to IB officials.
Insurance companies here retain only a small portion of risk with them and transfer most of the risk to reinsurers located in India, Malaysia and countries in Africa, among others.
Meanwhile, claim settlement of damages caused by the earthquake by life insurance companies is better as compared to non-life insurers. A total of nine life insurers have so far settled 217 — or 74.32 per cent — of the 292 claims received so far.
Nepal Life Insurance Company is the best performer among life insurers and has settled 97.51 per cent of the total claims worth Rs 20.14 million.