Nepali insurance companies are struggling to settle outstanding claims amounting to Rs 35.36 billion, leaving 157,559 insured individuals without their dues as of mid-April, according to the Nepal Insurance Authority (NIA). This includes 52,687 life insurance claims and 104,872 non-life insurance claims.
The delay in settlements reflects a broader crisis in Nepal’s state-facilitated insurance programs—COVID-19, farm, and health insurance—which are facing declining public trust due to delayed government reimbursements and unfulfilled subsidy commitments.
COVID-19 Insurance Woes
Launched in April 2020 and discontinued in July 2021, the COVID-19 insurance program saw 1.76 million policies sold, over 950,000 of which were subsidized by the government. Despite collecting Rs 1.5 billion in premiums, non-life insurers are still awaiting Rs 11 billion in government reimbursements for claims. The Nepal Insurers’ Association (NIA) filed a petition at the Supreme Court in September 2024, demanding that the government fulfill its obligations.
Farm Insurance Under Strain
The government introduced subsidized crop and livestock insurance in 2013, offering subsidies of up to 80%. However, delayed payments continue to disrupt the scheme. In fiscal year 2023/24, the government failed to release Rs 370 million in allocated subsidies, and over Rs 1.5 billion remains pending in the current fiscal year. Insurers were previously forced to halt policy sales due to subsidy delays, prompting a reluctant government response with Rs 3 billion in overdue releases.
National Health Insurance Overloaded
The national health insurance program, launched in 2016, has extended coverage to over 8.2 million people, with families paying Rs 3,500 annually for up to Rs 100,000 in benefits. Despite over 9.74 million claims, the Health Insurance Board still has Rs 18 billion in unsettled dues, including Rs 2 billion from the previous fiscal year.
Eroding Confidence
Insurance expert Rabindra Ghimire warns that public confidence in government-backed insurance schemes is waning due to repeated delays and systemic apathy. A senior NIA official, speaking anonymously, confirmed that such delays have demotivated both insurers and potential policyholders.
