We feel general public will now take the initiative to insure their lives

ShareSansar.com, May 24: Insurance industry is reeling under a crisis unleashed by the catastrophic earthquake that hit the country on April 25. Many insurance companies have been flooded with requests for claim settlement and most of them have been scrambling to respond properly to the situation. ShareSansar.com got in touch with Nepal Life Insurance Company Limited to find out how the company was affected by the crisis and how it has been coping with the challenges. In response, the company said it was prepared for such calamities, and that its focus, at present, has been to help its clients by expediting the claims process while also helping the victims through various relief works in the affected areas as well. Please find the full text of the interview below: What is the extent of exposure of the life insurance sector to the recent disaster? We cannot immediately say exactly how many of our clients have lost their lives because there is still a lot of work being done to identify causalities. Further bigger shocks after the main quake of 25th May 2015 have hindered the process to a large extent and also caused additional damages. But our exposure does not seem as severe as we had initially expected. What are the short and the long-term effects of the disaster on the insurance sector? In the short term, the new businesses that we were procuring will be hampered till people recover from this disaster and the situation comes back to normal. But in the long term, we expect the business to grow due to a heightened awareness level and the realization of the importance of life insurance policies among people. Were the insurance companies in Nepal prepared for the possibility of such a disaster? Being a leading life insurance company and knowing that Nepal is a country vulnerable to earthquakes, we had done all the necessary preparations. The preparedness were in terms of risk management, fund management, proper and safe investments, human resource management and development of a system that has helped us operate even during such catastrophic situation. How many claims have you received and how many have you settled so far? Informally, we have received information about 25 cases of earthquake related deaths but requests for claims are yet to be formally filed. Apart from that, we have settled all of the 10 death claims formally received till date. The settlement amounted to a total of Rs 86,40,000. What have you done or are doing to ease the pain of earthquake-hit clients? Nepal Life has donated an amount of Rs 51 lakhs to the Prime Ministers’ Disaster Relief Fund to help the earthquake victims. The amount was donated through Beema Samiti. Apart from that we have internally simplified the process of claims making it extremely efficient. On an average every claim settled till now have been done within a day or so. Also we have been providing our service from all the branch offices throughout the country. What lessons insurance companies must learn from this event? Life insurance companies should properly plan and analyze such disastrous situations by good quality products, proper risk assessment, extremely analytical fund management and investments and reinsurance with a sound company. We have Hannover Re as our reinsurance partner which is the 3rd biggest reinsurance company in the world. Will this disaster help bring a turnaround on how people look at the insurance sector? It will certainly change the view Nepalese people had about of life insurance companies. Before they used to consider it unnecessary, but now they will surely understand the importance of life insurance policy. We feel that the general public will now take the initiative themselves to insure their lives. How long will the insurance sector take to recover from the slump triggered by the disaster? Given the tendency of the Nepalese to return to normalcy quickly, we expect that the insurance sector would recover in a month’s time. What is the highest insurance claim amount that you have received so far? The highest claim pay out we have made amounted to Rs 30,93,000. How long will it take for the beneficiaries to receive the sum assured? In cases where people have come with proper documents, we have settled claims even within a day. How is the company planning to adjust the losses? During the process of valuation there is provision for such calamities, so we don’t need to specifically worry about the losses caused by the earthquake. In addition, we have a sound reinsurance support. Any rough estimate about what the final claims settlement figure would look like? It would be too early to give even a rough estimate at this stage. But official and informal calculations put the claim settlement sum to the tune of about 2 crores.