Mr. Laxmi Prasad Das is director and Chief Executive Officer (CEO) of LIC Nepal a leading Life Insurance Company of Nepal. LIC Nepal itself is a part of LIC India a government owned Insurance Company of India. It has expanded its business on 22 countries along with Nepal. And, in Nepal LIC Nepal is succeed to be honored by ISO certification 9001:2015. aarthiknews.com has made a valuable discussion with Mr. Das about various aspects of Life Insurance sector of Nepal. Here is the edited excerpt of this conversation:
How do you see the competitive market of life insurance in Nepal at present?
Life insurance has become a basic need for people of present world. Life insurance has several purposes. Its most important function is to replace the earnings that would cease at the death of the insured. If a person dies during his earning years, his family could suffer a severe economic loss as a result of losing his current and future income. Unfortunately, his family would still have to pay its regular bills, the mortgage, and outstanding debts, and perhaps even continue saving for college and retirement. Unless he is independently wealthy, achieving these goals may be virtually impossible for his family with the loss of his steady income. Life insurance offers a way for people’s family to continue living comfortably and without worry.
Life insurance market of Nepal is at growing stage now. There are 19 life insurance companies in Nepal and all are working competitively in the open market. In a last couple of years, a tremendous growth in life insurance could be observed both in number of insured and collection of premium. Insurance agents are reaching to the doors of home of citizens and providing insurance coverage to them. Besides these, Companies are also bringing better products and giving good returns to policyholders along with risk coverage. Still, a huge number of citizens are out of reach of insurance coverage and Companies are to plan to cover them.
Have you noticed any hurdle by legal framework or policy lapses?
I do not want to comment on legal framework or policy lapses because this is regulatory parts of the Government. I just want to say that government policy for life insurance should be good and supportive. LIC Nepal a most compliant life insurance company so we always respect and comply the regulatory and legal obligations.
Can you please analyze in brief the opportunities and challenges of life insurance companies of Nepal ?
From the recent data, we still see more than 80% population of Nepal are out of reach from life insurance coverage. They and their families need to be protected. Life insurance Companies have good opportunity now for expanding their business. The Companies which explores the market and perform best continuously at least for coming 5 years will lead the market. The policyholders also can avail benefits of higher returns from the competitive market.
In Nepal, there are 19 life insurance companies competing in the market now. So, we are observing that life insurance companies of Nepal are facing the challenges like lack of technical insurance manpower for companies and miss-selling of insurance products. There is need for better software to enrich the customer servicing.
Peoples are in the opinion that the number of Life Insurance is more than enough, are you agree with this statement?
As the CEO of a Company, I should not comment over the number of life insurance companies at present situation of Nepal. Here, I want to mention that Companies which wins the trust of citizens will remain ahead in the market.
There is a rumor that the rhetoric of BIG MERGER has entered in Insurance sector, are you aware about it?
Yes, such rumor has hit my ears as well. As far as LIC Nepal is concerned, we have no such intention. LIC of India, a government undertaking life insurance company in India is the major shareholder of LIC (Nepal) Limited and it needs approval of it when there is an option.
Is there crucial value of Paid up capital in insurance company? I mean, how do you define the role of Paid Up capital for a running insurance company?
Paid up capital in insurance company has a significant role. This creates trust for the company. Obviously, the insurance company collects premiums from the customers and the customers also want to be assured that the company is financially sound by the point of their paid up capital. Generally, the regulatory authority fixes the paid up capital for insurance companies to make them liable and accountable towards their works. LIC Nepal has already fulfilled the paid up capital as the prescribed by the Beema Samiti.
The system of Bancassurance has phased out by Government of Nepal before its maturity though it has in good practice in aboard. Do you say anything about it?
In the last financial year, the life insurance companies of Nepal had collected a good sum of premium from Bancassurance. This sector has also a major role in dissemination of insurance. However, it depends on the Government regulations from time to time.
Let’s talk about LIC Nepal, how do you define it in insurance sector of Nepal?
LIC Nepal is a matured Company in insurance sector of Nepal. Presently, we are servicing to our customers from 74 branches and 1 corporate office and by 250 employees and 44,000 agents across the nation. We believe in transparent accounting and good governance system. This Company gets the special patronage from its parent institution i.e. LIC of India whose business expansion lies in 22 countries of the world.
Do you have any concrete reason why LIC Nepal can be a best choice of Nepali peoples?
There are several reasons to choose LIC Nepal. In general, customers take insurance policy of 5 or 10 or 15 years’ term. Our minimum bonus rate for policyholder in all conventional plans having terms from 5 to 15 years is Rs. 66 per 1000 per year which is highest in the industry. The bonus rate increases along with the increase in policy term by which our policyholders may get higher returns at the time of maturity claim or death claim or taking loan or surrendering policies. LIC Nepal is first and only ISO 9001:2015 certified life insurance Company of Nepal and adopts the best life insurance practices in the Company.
If you have to refer for any product of LIC to me which one will in your choice?
Ours highest sold products are Jeevan Anand, Jeevan Tarang, DhanBristi, Jeevan Saathi, Child Endowment and Jeevan Bidhya. Different products have different unique features. If you would tell us your age, family background and intended premium to be paid, we could prefer you the exact product for you. However, I suggest you to consult our agents or nearby branch office for your query.
In the present scenario, there is a need of guaranteed returns for future terms. There is also no proper pension product to cater to the public. Our Jeevan Tarang gives attractive returns on maturity along with guaranteed returns after the maturity till death. This policy won the trust of the public last year with highest ever premium collection along with our all time charismatic policy Jeevan Anand.
How do you want to conclude this interview?
I would like to thank the team of aarthiknews.com for this opportunity of interview. Also, I would like to thank all my agents, marketing representatives, agency managers and office staffs for their help and support for making this Company with a great social significance.