Kathmandu. Sun Nepal Life Insurance, which has been at the forefront of the sale of Foreign Employment Insurance (FEI), is now focusing on the sale of traditional insurance policies.
Nepal Insurance Authority (NEA) has implemented the new criteria regarding the distribution of collected insurance fees of foreign employment insurance. Whatever insurance premium collected by the insurer through online by the AUTHORITY, the current fiscal year 2081. Based on the business since July 82,
The insurance company has launched a nationwide campaign with the slogan ‘New Journey New Beginning’. Chief Executive Officer of the company Raj Kumar Aryal, Senior Deputy CHIEF Executive Officer Kabi Phuyal and Head of Market Department Ganesh Chalagain are in the country. The first phase of the campaign, which started from bhaktapur on May 15, will conclude at birgunj on Sunday.
Sun Nepal, which has been leading the foreign employment insurance business for the last five years with more than 35 percent share, has launched a campaign to raise employees and agents for the sale of traditional insurance policies (of term and saving nature).
Company’s Information Officer Ganesh Chaulagain said that the campaign has been launched with the objective of raising awareness and motivating employees and agents to work more customer-friendly.
The insurance company has launched the campaign for the last two months of this fiscal year. It has been seen that the sale of traditional insurance will start aggressively from 83.
How is the situation in traditional business:
Sun Nepal Life Insurance has emerged as the weakest among active life insurers in the domestic market. The insurance premium collected by Sun Nepal Life for term insurance is even lower than that of the state-owned National Life Insurance Company.
According to the data published by the Nepal Insurance Authority, Sun Nepal has earned Rs 805.3 million from renewable insurance (excluding foreign term) in the first 10 months of the current fiscal year (up to April). The national life insurance company’s first insurance premium for the sale of such insurance policy is Rs 926.6 million.
Sun Nepal accounts for only 2.93 percent of the first insurance premium collected by life insurance from the sale of non-foreign term insurance. The share of national life insurance is 3.35 percent.
Exiting foreign countries gradually:
Since Sun Nepal took over the responsibility of selling foreign employment term insurance in a rotational system, its business has been more focused on term insurance than term insurance. Sun Nepal accounts for 34 per cent of the total foreign employment term insurance premium collected. This is the highest.
According to the Nepal Insurance Authority( NEA), life insurers have collected a total of Rs 2.88 billion from foreign employment insurance till mid-April. Of this, Sun Nepal has collected 34 percent i.e. Rs 987.67 million.
Sun Nepal seems to have diverted attention from the sale of foreign employment insurance policy since May after the AUTHORITY adopted a strategy to gradually distribute the foreign employment insurance business in a proportional manner.
The current fiscal year 2081 BS based on the business allocation determined by the AUTHORITY. In 1982, the actual share of Sun Nepal is only 16 percent. As the share of this allocation is shrinking more and more in the coming financial years, there is a risk of question marking the continuity of the business, so the management of the insurance company has given priority to the sale of traditional insurance policies.
The shrinking share of Sun Nepal during this period is not only due to the NRA’s strategy, but also because other insurers are also focused on the sale of foreign term insurance by unhealthy competition. With the withdrawal of Sun Nepal, the data of insurance collected through Asian Life Insurance has increased.
Since when in this business?
After getting the responsibility of managing the sale of foreign term insurance under the rotational arrangement in 2077 BS, Sun Nepal left the sale of all other types of insurance and concentrated on foreign employment insurance.
In the recent past, foreign employment has been expressing dissatisfaction with the provision related to the distribution of business after the issuance of the Bridge Management Directive 2081. If the provisions of the directive are fully implemented and the business is not diversified, it will be a challenge for Sun Nepal to continue the business.
Why was foreign employment focused on insurance?
Sun Nepal Life’s focus can be on this as it has more savings than risk, profits can be distributed to shareholders immediately and foreign reinsurers do not have to pay reinsurance fees for reinsurance, there is no complex insurer evaluation process like other insurance policies, and the insurer does not have to pay service fee regularly to prepare a new policy.
You don’t have to rely on an agent to sell this policy. There is no need for any kind of training. If it is limited to the service charge fixed by the AUTHORITY, then there is no need to spend a large amount of money as agent incentives as in the term insurance policy.
If the digital wallet company and the manpower company can be taken under the influence, the business can easily be done.
CONTRIBUTION of FEI to overall business:
According to the Nepal Insurance Authority( NEA), 14 life insurers have collected Rs 27.45 billion from the sale of new insurance policies in the last 10 months. This amount accounts for 92 percent of the total new business excluding small life insurers. Of this, only 8 percent is contributed by foreign employment term insurance.
Although the AUTHORITY had directed the insurer to issue the insurance policy through the bridge from January 1, 2019, to control the distortion of issuing fake insurance policy and taking undue advantage of the middlemen, it was canceled again from July 1, 2019 due to pressure from the insurer.
