KATHMANDU, SEP 13 -
Insurance claims have dropped sharply following the start of the peace process half a decade ago and a halt to acts of destruction.
According to insurance pool officials, claims are expected to remain below Rs 100 million in the last fiscal year 2011-12 with compensation paid as of the third quarter of the last fiscal amounting to Rs 58 million. Payments in previous years have been higher than that level.
Going over the figures of the last eight years, payments jumped from Rs 242.52 million in fiscal 2004-05 to Rs 401 million in 2005-06. The figure then plunged to Rs 147 million in 2006-07 following People’s Movement II that paved the way for the Maoists to enter peaceful politics. Payments rose slightly in 2007-08 and then have been on a continuous decline till the last fiscal year. “The peace process and a decrease in damage by terrorist type of attacks might have a huge bearing on the decreased claims,” said Ramesh Lamsal, CEO of the pool. The pool was established to give insurance coverage to terrorist damage in the country after foreign reinsurance companies declined to give coverage to such damage during the height of the Maoist conflict in Nepal. Insurance coverage given by the pool is related to fire, engineering, motor and miscellaneous.
“We compensate the insurers based on the nature of the damage whether it has been caused by rioting or other terrorist type of activities,” said Lamsal. “Police and surveyor’s reports are considered when paying the claims.”
The pool’s financial status has also strengthened with fewer claims and increased premiums. Over the last eight years, premiums collected by the pool increased continuously until fiscal 2009-10 but came down slightly in 2010-11.
Premiums soared from Rs 546 million in 2004-05 to Rs 859 million in 2009-10. In the following year, premiums amounted to Rs 858
million, and the collection as of the third quarter of the
last fiscal year stands at Rs 558 million.
“The drop in claims has strengthened our financial position when we are planning to convert the pool into a reinsurance company,” said Lamsal. Currently, the pool has funds of around Rs 1.5 billion including capital, reserves and profits of the last fiscal year.
It paid Rs 340 million in income tax this year. “We actually paid Rs 250 million and adjusted the tax deduction at source (TDS) made by the banks while depositing our money there,” said Lamsal.
Insurance claims have dropped sharply following the start of the peace process half a decade ago and a halt to acts of destruction.
According to insurance pool officials, claims are expected to remain below Rs 100 million in the last fiscal year 2011-12 with compensation paid as of the third quarter of the last fiscal amounting to Rs 58 million. Payments in previous years have been higher than that level.
Going over the figures of the last eight years, payments jumped from Rs 242.52 million in fiscal 2004-05 to Rs 401 million in 2005-06. The figure then plunged to Rs 147 million in 2006-07 following People’s Movement II that paved the way for the Maoists to enter peaceful politics. Payments rose slightly in 2007-08 and then have been on a continuous decline till the last fiscal year. “The peace process and a decrease in damage by terrorist type of attacks might have a huge bearing on the decreased claims,” said Ramesh Lamsal, CEO of the pool. The pool was established to give insurance coverage to terrorist damage in the country after foreign reinsurance companies declined to give coverage to such damage during the height of the Maoist conflict in Nepal. Insurance coverage given by the pool is related to fire, engineering, motor and miscellaneous.
“We compensate the insurers based on the nature of the damage whether it has been caused by rioting or other terrorist type of activities,” said Lamsal. “Police and surveyor’s reports are considered when paying the claims.”
The pool’s financial status has also strengthened with fewer claims and increased premiums. Over the last eight years, premiums collected by the pool increased continuously until fiscal 2009-10 but came down slightly in 2010-11.
Premiums soared from Rs 546 million in 2004-05 to Rs 859 million in 2009-10. In the following year, premiums amounted to Rs 858
million, and the collection as of the third quarter of the
last fiscal year stands at Rs 558 million.
“The drop in claims has strengthened our financial position when we are planning to convert the pool into a reinsurance company,” said Lamsal. Currently, the pool has funds of around Rs 1.5 billion including capital, reserves and profits of the last fiscal year.
It paid Rs 340 million in income tax this year. “We actually paid Rs 250 million and adjusted the tax deduction at source (TDS) made by the banks while depositing our money there,” said Lamsal.
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