Nepal Life Insurance Company (NLIC), established in April 2001, takes pride in being the first insurance company that came up to deal on life insurance business exclusively in the country. For the two companies that dealt on life insurance business prior to it were composite companies covering both life and general insurance businesses.
"The establishment of an exclusively life insurance company was the demand of the time," says Kamal Raj Gautam, Senior Branch Manager of NLIC. Reasons: A specific middle class group was growing fast and they were gradually becoming aware of social dimension of insurance products. The level of awareness, of course, could not be gauged as 'very encouraging', but it definitely had create a room for a life insurance company to come into play, adds Gautam.
Like many other companies, NLIC commenced its services in the capital city, opening an office in Kathmandu. It took not much time to secure its place in the market here. So, in order to expand the pie and also to tap opportunities present in other regions, it opened branches in Biratnagar and Birgunj in subsequent years. Currently, the company operates through 10 branches in different parts of the country. It is also in the process of converting two of its contact offices into full-fledged branches soon.
NLIC offers an array of life insurance plans like Surakshit Jeevan, Dhan Varsha, accident benefits, Surakshit Bhavishya, Jeevan Shanti, and Child Education and Marriage Endowment Plan, among others. "Of these, Surakshit Jeevan turned out to be the most preferred product," says Gautam.
The company even takes pride in bringing innovative products in the market, targeting different groups of clientele. Child education and marriage endowment is one of such products. While the majority of products available in the market looks to secure clients in financial terms in the post-retirement period, products like these aims to pledge financial support to the clients in the middle-age.
"Insurance coverage, in any case, is extremely helpful for providing periodical financial needs of family, for making provision for old age and for covering the tangible risks in financial terms," says Gautam. However, there is a limited group of people who understands such benefits. Still less are the people who really take benefits from it.
No wonder, the initial days were really tough for the company, states Gautam. "It was mainly the people who had substantial disposable income and could pay annual premium with relative ease availed our services in the beginning," he adds.
But that section of population always stands in a modest number in a given city. Unless insurance education is incorporated in regular system and people are genuinely informed of its cost and benefits, insurance companies would really find it hard to explore new avenues, opines Gautam. "Poor awareness level has not only limited the real business pie, but also prevented companies from being innovative and coming up with new products from different age and social groups," says he.
Nonetheless, the company has already build a strong client base of more than 60 thousand policy holders in the span of just the three years. Also it has created employment opportunities for about 1,000 insurance brokers. It periodically trains its human resource in different aspects regarding the insurance sector.
"All our branches are given independence to formulate and carry out their own area-specific strategies and policies," says Gautam. Of course, those should be in line with the main corporate strategies and policies that are decided at the center, he adds.
Such decentralization in strategy formulation and operation has enhanced productivity, efficiency and overall performance of NLIC, say the company officials, who further give credit of its fastest growing customer base to such a way of operation and the brokers working at the grassroot level.
In order to remain distinct in the insurance market, it has recently upgraded its human resource as well as technical resources. "We have installed a new computer software, updated accounting and fine-tuned our services to deliver speedy services," claims Gautam.
NLIC currently employs 58 staff. It has re-insurance arrangement with Hannover-Re, a reputed German re-insurance company. Moreover, the company is planning to offer new "planned products", which the officials prefer not to disclose.
Despite portraying optimistic picture, Gautam, meanwhile, laments that the sound investment avenues have shrank significantly in recent period, which has forced the life insurance companies that have mobilized huge capital in the form of premium from making according contribution in the economy.
"The investment opportunities are already low. Hence, concerned actors and regulators should make a joint effort to explore out or create new investment avenues," he said, adding that the money collected by the life insurance companies, afterall, must be returned back to the policyholders adding bonus and other returns to it.
"The establishment of an exclusively life insurance company was the demand of the time," says Kamal Raj Gautam, Senior Branch Manager of NLIC. Reasons: A specific middle class group was growing fast and they were gradually becoming aware of social dimension of insurance products. The level of awareness, of course, could not be gauged as 'very encouraging', but it definitely had create a room for a life insurance company to come into play, adds Gautam.
Like many other companies, NLIC commenced its services in the capital city, opening an office in Kathmandu. It took not much time to secure its place in the market here. So, in order to expand the pie and also to tap opportunities present in other regions, it opened branches in Biratnagar and Birgunj in subsequent years. Currently, the company operates through 10 branches in different parts of the country. It is also in the process of converting two of its contact offices into full-fledged branches soon.
NLIC offers an array of life insurance plans like Surakshit Jeevan, Dhan Varsha, accident benefits, Surakshit Bhavishya, Jeevan Shanti, and Child Education and Marriage Endowment Plan, among others. "Of these, Surakshit Jeevan turned out to be the most preferred product," says Gautam.
The company even takes pride in bringing innovative products in the market, targeting different groups of clientele. Child education and marriage endowment is one of such products. While the majority of products available in the market looks to secure clients in financial terms in the post-retirement period, products like these aims to pledge financial support to the clients in the middle-age.
"Insurance coverage, in any case, is extremely helpful for providing periodical financial needs of family, for making provision for old age and for covering the tangible risks in financial terms," says Gautam. However, there is a limited group of people who understands such benefits. Still less are the people who really take benefits from it.
No wonder, the initial days were really tough for the company, states Gautam. "It was mainly the people who had substantial disposable income and could pay annual premium with relative ease availed our services in the beginning," he adds.
But that section of population always stands in a modest number in a given city. Unless insurance education is incorporated in regular system and people are genuinely informed of its cost and benefits, insurance companies would really find it hard to explore new avenues, opines Gautam. "Poor awareness level has not only limited the real business pie, but also prevented companies from being innovative and coming up with new products from different age and social groups," says he.
Nonetheless, the company has already build a strong client base of more than 60 thousand policy holders in the span of just the three years. Also it has created employment opportunities for about 1,000 insurance brokers. It periodically trains its human resource in different aspects regarding the insurance sector.
"All our branches are given independence to formulate and carry out their own area-specific strategies and policies," says Gautam. Of course, those should be in line with the main corporate strategies and policies that are decided at the center, he adds.
Such decentralization in strategy formulation and operation has enhanced productivity, efficiency and overall performance of NLIC, say the company officials, who further give credit of its fastest growing customer base to such a way of operation and the brokers working at the grassroot level.
In order to remain distinct in the insurance market, it has recently upgraded its human resource as well as technical resources. "We have installed a new computer software, updated accounting and fine-tuned our services to deliver speedy services," claims Gautam.
NLIC currently employs 58 staff. It has re-insurance arrangement with Hannover-Re, a reputed German re-insurance company. Moreover, the company is planning to offer new "planned products", which the officials prefer not to disclose.
Despite portraying optimistic picture, Gautam, meanwhile, laments that the sound investment avenues have shrank significantly in recent period, which has forced the life insurance companies that have mobilized huge capital in the form of premium from making according contribution in the economy.
"The investment opportunities are already low. Hence, concerned actors and regulators should make a joint effort to explore out or create new investment avenues," he said, adding that the money collected by the life insurance companies, afterall, must be returned back to the policyholders adding bonus and other returns to it.
