Reliable Life Insurance leading among the new life insurance companies. Prepare yourself for the upcoming public issue by understanding the performance of the new insurance companies

The rise in insurance industry showed a turn around after the dreading earthquake of 2015. The increasing awareness among people and their increasing living standard further benefitted the life insurance industry. Today, general public are more likely aware about the importance of insurance. Even the increased paid up capital could not put restrictions on this industry so, nine new life insurance companies got licensed and also came into operation after the paid up capital was hiked.

Among the insurance companies, the new life insurance companies that came into operation recently in Nepal are:

On this note, it is of no wonder that these new insurance companies might soon require funding from public in the form of IPO. Thus, to facilitate the enthusiasts in the primary and secondary market, the article has been prepared accumulating the analysis of recently published 4^th quarterly report of fiscal year 2074/75 of all the new life insurance companies that can be useful for investment purpose. The provided article might not be sufficient to evaluate the performance of the new life insurance companies as for most of them last year was simply a preparatory year. The true potential of these companies will be recognized this fiscal year.

Financial overview:

1. Number of policies:

Among the newly licensed insurance companies, Reliable Nepal Life Insurance Company (RENLICL) stood first with 122,940 policies. Union Life Insurance Company (ULICL) has the second highest number of insurance policies i.e. 69,590 followed by Citizen Life insurance Company (CLICL) with 55,536 policies. Reliance Life Insurance has the least number of insurance policies. However, the viewpoint provided by Mr. Pravin Raman Parajuli in one of the interviews by Share Sansar cannot be ignored while analyzing the policies. For instance, CEO Parajuli stated “Number of policies can be deceiving as it is the quality that matters than the number:. Few policies such as foreign employment insurance policy are smaller in sizes and bigger in numbers so, the number of policies may not reflect the true evaluation of a company.

Find the descending order of new life insurance companies in terms of no. of insurance policies:

2. Net premium:

As of fourth quarter of this fiscal year, among the infant insurance companies, Union Life Insurance Company (ULICL) has the highest net premium of Rs 76.23 crores. It is followed by IME Life Insurance Company Limited (IMELICL) with net premium of Rs 49.95 crores followed by Citizen Life Insurance Company (CLICL) with Rs 36.10 crores.

Find the descending order of new life insurance companies in terms of no. of net premium:

3. 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 shock can an insurance company be able to absorb at times of crisis. If we analyze the insurance fund of fourth quarter of 2074/75, Union Life Insurance (ULICL) has the highest insurance fund has Rs 35.47 crores followed by IME Life Insurance Company and Sun Nepal Life Insurance Company Limited. IMELICL and SNLICL have insurance funds of Rs 21.30 crores and Rs 16.25 crores.

Find the descending order of new life insurance companies in terms of  insurance fund:

4.Paid up capital:

Among the newly licensed life insurance companies, the company with highest paid up capital is Citizen Life insurance Company Limited (CLICL) with Rs 1.75 arba. Jyoti Life Insurance Company Limited (JLICL), in the second position has the paid up capital of Rs 1.54 arba.

5. Reserves and Surplus:

 In context of reserves and surplus, Reliable Nepal Life Insurance Company (RENLICL) has highest reserve with Rs 13.27 crores followed Jyoti Life Insurance Company Limited (JLICL), (11.87 crores). In the third place stands Citizen Life insurance Company Limited (CLICL) with a reserve of Rs 11.43 crores.

6. Net profit:

Among the new life insurance companies, Reliable Nepal Life Insurance Company (RENLICL) with net profit of Rs 12.78 crores and Jyoti Life Insurance Company Limited (JLICL) with Rs 10.90 crores are in the top list. Citizen Life insurance Company Limited (CLICL) earned a profit of Rs 10.86 crores.

Find the descending order of new life insurance companies in terms of net profit:

6. Annualized EPS

Among the new life insurance companies Reliable Nepal Life Insurance Company (RENLICL) has the highest EPS of Rs 9.13 followed by Jyoti Life Insurance Company Limited (JLICL) with an EPS of Rs 7.08. In the third position, we have by IME Life Insurance Company (IMELICL) with an EPS of Rs 7.05.

Find the descending of new life insurance companies in terms of EPS:

7. Net worth:

Analyzing the net worth per share, Reliable Nepal Life Insurance Company (RENLICL) has the highest net worth of Rs 109.48 followed by Jyoti Life Insurance Company Limited (JLICL) with net worth of Rs 107.71. In the third place, we have IME Life Insurance Company (IMELICL) with net worth per share of Rs 107.03.

Find the descending of  new life insurance companies in terms of net worth:

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.

Disclaimer: The sources of provided information are quarterly reports, website and spokesperson. Any misinterpretation from the sources might be not adjusted in the analysis.