The new and the old non life insurance companies- Find out which company won the race this quarter

  • -ShareSansar
Fri, May 24, 2019 4:06 PM on Exclusive, Financial Analysis, Stock Market,

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 insurance industry. Today, general public are more likely aware about the importance of insurance.

Among the insurance companies, the old listed non-life insurance companies existing in Nepal are:

 

Besides the above mentioned companies, two unlisted companies are National Insurance Company Limited and Oriental Insurance Company Limited. Similarly, General Insurance Company Nepal Limited, Ajod Insurance Limited and Sanima Insurance Company Limited are newly licensed insurance companies. Thus, to facilitate the enthusiasts in the secondary market, the article has been prepared accumulating the analysis of all the non-life insurance companies that can be useful for investment purpose. The article does not include unlisted old insurance companies.

Number of policies:

Once the paid up capital of insurance companies are in the same range, number of insurance policies identifies the company’s ability to market its schemes and products. Shikhar Insurance Company (SICL) has been maintaining a lead position with 215,905 insurance policies followed by Neco Insurance Company Limited (NIL) (204,103) and NLG Insurance Company Limited (NLG) (124,856) as of third quarter of FY 2075/76. The industry average number of policies is around 78,829. Eight companies have been able to maintain the number of policies above average.

Among the newly listed non-life insurance companies, the number of policies of Sanima General Insurance Company Limited (SAICL), Ajod Insurance Limited (AJOD) and General Insurance Company Nepal Limited (GINCL) are 7,989, 29,407 and 19,768 respectively.

Net premium:

Among the mentioned non-life insurance companies, Shikhar Insurance Company (SICL) has the highest net premium amounting to Rs 1.24 arba. It is followed by Neco Insurance Company (NIL) and Sagarmatha Insurance Company (SIC) with a net premium of Rs 85.70 crore and Rs 83.61 crore. The industry average net premium stands at Rs 44.27 crore where seven companies are operating above the average range.

Among the newly listed non-life insurance companies, the net premium of Sanima General Insurance Company Limited (SAICL), Ajod Insurance Limited (AJOD) and General Insurance Company Nepal Limited (GINCL) are 2.77 crores, 9.30 crores and 9.74 crores respectively.

Insurance fund:

If we analyze the insurance fund of third quarter of 2075/76, Rastriya Beema Company Limited (RBCL) has the highest insurance fund of Rs 1.64 arba. Shikhar Insurance Company (SICL) stands at the second position with a fund of Rs 1.01 arba. NLG Insurance Company (NLG) is seen in the third position with Rs 78.42 crore in insurance fund. The industry average insurance fund stands at Rs 49.02 crore with nine companies above average insurance fund.

Among the newly listed non-life insurance companies, the insurance fund of Sanima General Insurance Company Limited (SAICL), Ajod Insurance Limited (AJOD) and General Insurance Company Nepal Limited (GINCL) are 2.17 crores, 2.30 crores and 2.20 crores respectively.

Paid up capital

The governing authorities have asked all the non-insurance companies to meet the paid up capital requirement of at least Rs 1 arba. Neco Insurance Company Limited (NIL) has the highest paid up capital (Rs 1.17 arba), followed by Shikhar Insurance Company (SICL) (Rs 1.05 arba) and Himalayan General Insurance Company (HGI) (Rs 1.02 arba). Only four companies have been able to attain the paid up capital requirement so, bonus shares and right shares can be expected from the remaining companies. Recently IGI has proposed 5% bonus share, after this the paid up capital will reach Rs 1.02 arba; Similarly, SIL and SIC has proposed 15.48% and 86% bonus shares, after the adjustment their paid up capital will reach Rs 1 arba each. Likewise, NLG, UIC and LGIL has also proposed 60%, 240% and 20% right share respectively, after this adjustment their paid up capital too will shoot Rs 102.4, 102 and 105.6 crore respectively. EIC and NICL has already floated their 300% and 65% right share, once they allot those shares, their paid up capital will reach Rs 1.01 and 1.09 arba respectively. Now only, PIC, PICL and RBCL are left who are yet to propose any right/ bonus share to increase their paid up capital to minimum Rs 1 arba.

Among the newly listed non-life insurance companies, the paid up capital of Sanima General Insurance Company Limited (SAICL), Ajod Insurance Limited (AJOD) and General Insurance Company Nepal Limited (GINCL) is 70 arba. They are yet to float IPO to the general public.

Reserves and surplus:

Rastriya Beema Company Limited (RBCL) has the highest reserve of Rs 2.36 arba. It is further followed by Sagarmatha Insurance Company (SIC) with a reserve fund of Rs 69.98 crore. Finally, Premier Insurance Company (PIC) is seen in the third position with a reserve of Rs 64.20 crore. The industry average reserve and surplus stands at Rs 38.22 crore with only five companies above the average.

Among the newly listed non-life insurance companies, the reserves and surplus of Sanima General Insurance Company Limited (SAICL), Ajod Insurance Limited (AJOD) and General Insurance Company Nepal Limited (GINCL) are 1.75 crores, 1.98 crores and 1.98 crores respectively.

Net profit:

Among the non-life insurance companies, the third quarter report shows that Rastriya Beema Company Limited (RBCL) has earned the highest net profit of Rs 58.48 crore. It is further followed by Shikhar Insurance Company Limited (SICL) with net profit of Rs 33.61 crore. Neco Insurance Company Limited (NIL) further has a net profit of Rs 25.16 crores in the third place. The industry average net profit stands at Rs 15.48 crore. Five companies stand above the industry average range of Rs 15.48 crore.

Among the newly listed non-life insurance companies, the net profit of Sanima General Insurance Company Limited (SAICL), Ajod Insurance Limited (AJOD) and General Insurance Company Nepal Limited (GINCL) are 2.03 crores, 2.61 crores and 2.31 crores respectively.

Annualized EPS

The non-life insurance company that has won the race of annualized EPS is Rastriya Beema Company Limited (RBCL). The company’s annualized EPS stands at Rs 292.45. It is further followed by Sagarmatha Insurance Company (SIC) with an EPS of Rs 42.58. Finally, Shikhar Insurance Company (SICL) has an EPS of Rs 42.40.

Among the newly listed non-life insurance companies, the annualized EPS of Sanima General Insurance Company Limited (SAICL), Ajod Insurance Limited (AJOD) and General Insurance Company Nepal Limited (GINCL) are 3.88, 4.97 and 4.40 respectively.

Net worth:

Analyzing the net worth per share, Rastriya Beema Company Limited (RBCL) has the highest net worth of Rs 986.24 followed by Sagarmatha Insurance Company (SIC) with net worth of Rs 335.78. In the third place, we have Premier Insurance Company (PIC) with net worth per share of Rs 299.43. The industry average net worth per share stands at Rs 244.94 with only four companies above the industry average.

Among the newly listed non-life insurance companies, the net worth of Sanima General Insurance (SAICL), Ajod Insurance Limited (AJOD) and General Insurance Company Nepal Limited (GINCL) are 102.81, 106.57 and 105.98 respectively.

PE Ratio:

The PE ratio indicator shows Nepal Insurance Company Limited (NICL) has the least ratio of 14.01 times. It is further followed by Neco Insurance Company Limited (NIL) with a PE Ratio of 18.06 times. Shikhar Insurance Company Limited (SICL) has a P/E ratio of 20.31 times.

In a nutshell:

What do you think about the performance of non-life insurance industry? Would you prefer purchasing the IPOs of newly licensed insurance companies.

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