Did you miss out our regular updates of life insurance companies this quarter? Find out the major indicators of all life insurance companies in one chart!

The life insurance companies have published their fourth quarter financial reports. Although the actuarial valuation of the companies’ reports are still pending, the quarter end reports can draw a picture on the performance of these companies. Let’s look on the basis of each indicator:

Financial overview:

Number of policies:

Number of insurance policies reflects the company’s ability to market its schemes and products. Nepal Life Insurance Company Limited (NLIC) maintains a lead position with 12.80 lakhs insurance policies followed by Life Insurance Corporation Nepal Limited (LICN) with 12.39 lakhs policies and National Life Insurance Company Limited (NLICL) with 7.21 lakhs policies as of fourth quarter of FY 2075/76.

Among the newly licensed insurance companies, Reliable Nepal Life Insurance Company (RENLICL) is in the lead with 6.46 lakhs policies. Union Life Insurance Company Limited (ULICL) has the second highest number of insurance policies i.e. 1.34 lakh followed by Citizen Life Insurance Company Limited (CLICL)  with 1 lakh policies.

However, investors of all life insurance companies should understand the quality of insurance policies is important rather than number of insurance policies. Moreover, these policies might include scheme such as foreign employment insurance policy which provides less net premium so some insurance companies do not prefer such policies. Hence, judging an insurance company based only on number of insurance policies would be absurd.

 Net premium:

As of fourth quarter of this fiscal year, among the new life insurance companies, Union Life Insurance Company (ULICL) has the highest net premium of Rs 2.95 arba. It is followed by Reliable Nepal Life Insurance Company (RENLICL) with net premium of Rs 1.33 arba.

Among the previously registered companies, Nepal Life Insurance Company Limited (NLIC) has the highest net premium amounting to Rs 22.82 arba. It is followed by Life Insurance Corporation (LICN) and National Life Insurance Company Limited (NLICL) with a net premium of Rs 13.34 arba and Rs 7.80 arba.

Life insurance fund

Life insurance fund is considered to be one of the most important factors in the financial statement. This indicator provides an estimate on how much advance preparation has an insurance company done for crisis. If we analyze the insurance fund in fourth quarter of 2075/76, Nepal Life insurance Company (NLIC) has the highest insurance fund of Rs 65.36 arba. Life Insurance Corporation Nepal (LICN) stands at the second position with a fund of Rs 54.01 arba. National Life Insurance Company Limited (NLICL) is seen in the third position with Rs 27.19 arba in insurance fund.

In context of insurance funds, Union Life insurance Company (ULICL) has the highest insurance fund of Rs 2.12 arba followed by Jyoti Life Insurance Company (JLICL) and IME Life Insurance Company Limited (IMELICL). They have insurance funds of Rs 72.88 crores and Rs 70.25 crores respectively.

Paid up capital:

Nepal Life Insurance Company (NLIC) has the highest paid up capital (Rs 5.50 arba), followed by National Life Insurance Company (NLICL) (Rs 3.01 arba) and Asian Life Insurance Company Limited (ALICL) (Rs 2.01 arba). The old life insurance companies need to meet the paid up capital of Rs 2 arba at the soonest possible.

Among the newly licensed life insurance companies, the company with highest paid up capital is Citizen Life insurance Company (CLICL) with Rs 1.75 arba. Jyoti Life Insurance Company (JLICL), in the second position has the paid up capital of Rs 1.54 arba. Finally, Union Life Insurance Company (ULICL) has a paid up of Rs 1.50 arba. All 10 newly licensed life insurance companies are yet to issue IPO shares to the general public to make minimum paid up capital of Rs 2 arba.

Reserves and surplus:

Nepal Life insurance Company Limited (NLIC) has the highest reserve of Rs 2.43 arba. It is further followed by MetLife American Life Insurance Company (ALICO) with a reserve fund of Rs 2.09 arba. Finally, Prime Life Insurance Company (PLIC) is seen in the third position with a reserve of Rs 1.24 arba.

Reliable Nepal Life Insurance Company (RENLICL) has highest reserve with Rs 44.14 crores followed by Citizen Life Insurance Company Limited (CLICL) (25.11 crores). In the third place stands Jyoti Life Insurance Company (JLICL) with a reserve of Rs 23.21 crores.

Net profit:

Among the life insurance companies, the fourth quarter report shows that Nepal Life Insurance Company (NLIC) has earned the highest net profit of Rs 52.33 crores. It is further followed by National Life Insurance Company Limited (NLICL) with net profit of Rs 33.63 crores. Finally, Metlife - American Life Insurance Company Limited (ALICO) has a net profit of Rs 31.86 crores.

Among the new life insurance companies, Reliable Nepal Life Insurance Company (RENLICL) with net profit of Rs 19.57 crores. Secondly, Citizen Life Insurance Company Limited (CLICL) reported net profit of Rs 17.05 crores. Jyoti Life Insurance Company (JLICL) has a net profit of Rs 12.46 crores.

The provided net profit figure is not the complete picture. Usually, net profit figure is increased once actuarial valuation has been completed. Amount from life insurance fund is transferred to net profit after such valuation. Hence, the amount is likely to escalate.

 EPS:

The insurance company that has won the race of EPS is Prime Life Insurance Company Limited (PLIC). The company’s EPS stands at Rs 17.54. Surya Life Insurance Company Limited (SLICL) is seen in the second place with an EPS of Rs 16.46. Finally, National Life Insurance Company (NLICL) has an EPS of Rs 11.18.

Among the new life insurance companies, Reliable Nepal Life Insurance Company (RENLICL) has the highest EPS of Rs 18.64 followed by Citizen Life Insurance Company Limited (CLICL) with an EPS of Rs 9.74. In the third position, we have Jyoti Life Insurance Company Limited (JLICL) with an EPS of Rs 8.09.

Net worth:

Analyzing the net worth per share, Life Insurance Corporation Nepal Limited (LICN) has the highest net worth of Rs 178.55 followed by Prime Life Insurance Company (PLIC) with net worth of Rs 176.70. In the third place, we have Nepal Life Insurance Company (NLIC) with net worth per share of Rs 152.28.

Reliable Nepal Life Insurance Company Limited (RENLICL) has a net worth of Rs 131.53. Prabhu Life Insurance Limited (PRLIL) has the net worth per share of Rs 130.54.

P/E ratio:

The insurance company with least P/E ratio is Surya Life Insurance Company Limited (SLICL). Its P/E ratio is 18.23 times. Similarly, Prime Life Insurance Company Limited (PLIC) has a P/E ratio of 23.66 times.

In a nutshell:

Given the study on these life insurance companies, what strengths and opportunities do you think they have in the highly dominated insurance industry? Do you think the new insurance companies will match the pace of the big giant insurance companies? Would you prefer investing in these new insurance companies if the opportunity of investment is granted? Please write in the comment section below.