“Wherever you go and whatever you do, the secret to success is continuous learning and adaptation”; Interview with Vijaya Bdr. Shah, CEO of Nepal Insurance Company

Vijaya Bahadur Shah, CEO of Nepal Insurance Company, is a visionary and a true performer. He started his career from 1989 at Surya Nepal and after 12 years of hard work he joined Gorkha Brewery. Similarly he has also collected experience from Nepal Trust for Nature Conservation, National Investment and capital market, NLG Insurance and provided valuable services as the President of Nepal Insurers association. He is also the unanimously elected president of AIRDC.

Nepal Insurance Company, established in 1947 AD, is the oldest company of Nepal. With over 71 years of existence, it has been through several thick and thins and survived them all, that is precisely why it's a fighter. In this backdrop Rachit Agrawal, Aakriti Thakali and Krishna Khatiwada from Sharesansar visited Mr. Shah. The excerpts of the interview are:

Insurance industry

How has the non-life insurance sector grown over the years?

The history of non-life insurance industry goes back to 71 years. However, the pace of growth was pretty slow during the initial stages. After the liberalization of market, many new companies joined and the entire industry started working towards the expansion of this industry. The growth may not be as expected, but it's still very encouraging. We've been growing at a rate of 15% for the last 10 years and that too in CAGR (Compounded annual growth rate), which is not a small number in anyway.

I agree that the outreach is still not very satisfactory and that is primarily because in Nepal insurance was never a priority. Safety always comes second but now we're trying to change the rule of the game.

The growth rate of general (non-life) insurance sector has been consistently higher than the life-insurance sector. If the third-party insurance of vehicles wasn't made compulsory, would it be possible to achieve this growth rate?

I think, rather than looking at it that way, whatever might be the reason the industry has grown. If there is a need to make insurance compulsory for any sector then that is done for the good of whole population. The roads in our country are not very well constructed, with over-capacity and reckless driving and because of that country had experienced lots of disturbances. At that time, if you were travelling from Pokhara to Kathmandu, you couldn't know when you'd reach. Then when this insurance was made compulsory at least that part was over.

Similarly, the other reason was we had to let people know. Like I said for us, safety came second. Insurance was never in anybody's top of the mind. Whatever happens, happens – we'll deal with it. Now, the things have changed. While driving we stay careful, we fasten the seatbelt and follow traffic rules. And even then if something happens then there's insurance that will save us.

So I'm happy that motor insurance is compulsory. If you see in other countries, there are other types of insurances too that are made compulsory. In context of Nepal it is still not possible because a large section of population has other priorities to meet like food, shelter, clothing and so on and then comes the safety. That is why I believe that it was a right thing to do.

Over the years have you seen any significant change in the people's perception regarding insurance in Nepal? Especially after the earthquake?

Oh yeah I have seen a great deal of change in perception. Ten years ago when I joined this industry, most people weren't aware of it, there weren't much players, there wasn't much depth in the industry. Even insurance companies' risk taking capabilities were very limited because they were equity based. Now that has changed.

Even in case of Nepal Insurance Company, it was established with a capital of Rs one lakh only and today it is going to increase its capital to a billion. So look at the depth now versus past. With the increase in capital and investment, insurance companies are also investing in technology to increase their outreach at a minimal cost possible. The advancement in technology, overcomes the obstacles of geography. And in this whole process I am very delighted to witness this industry flowering.

The insurance sector regulator, Beema Samiti, is not as active as the NRB. Do you think they need to step up or is it okay?

I cannot compare one regulator with another because they have different ways of operation and different areas of jurisdiction. But I do want to say that Beema Samiti with whatever limitations they have is still regulating this industry. There is an expectation from everybody so we must always strive to become better. I must strive to become better. Beema Samiti should strive to become better and that is how the growth occurs. So all of us are rigorously engaged in making ourselves better.

Where do you see this sector five years down the line?

Traditionally, insurance sector was not as glamorous as the banking sector in Nepal. A lot of people used to provide first preference to banking when they had to make a career choice. It could be because insurance sector started 10 years later than the bank and there has been a gap but now with the advent of technology we don't have to worry about reinventing the whole thing. So in a few years' time insurance industry will be at par with the banks. We have money, we have a large untouched market to explore and we have technology. So definitely we are going to reach heights.

Nepal Insurance Company

What are your core strengths?

Nepal Insurance Company being the oldest , has been here for 71 years and in that tenure a lot of regimes have changed, a lot of companies have come and gone. So it has the strengths of an established system of over 71 years, institutional investor – Nepal Bank Limited and the third generation of employees. I can see a lot of hard work and commitment from their side, which is the real asset of our company.

How would you summarize the progress of NICL till now and the plans for future?

We have set plan and we're moving according to it. In many occasions, what we had planned to achieve in 4 years have been achieved in 1. So we are redefining our directions and trying to propel this company to next orbit. NICL was the first company in Nepal and now we're striving to become the best.

Recently, all the insurance companies and banks have been involved in bancassurance agreements. Has it brought any quantitative results so far?

First of all what is required is the change of mind set. In the past banks were more reserved, but now they have realized that they have to serve their equity and provide fair return to all the stakeholders and bancassurance in one of those methods. In many countries if you see, banks make more money from bancassurance than regular operations. In context of Nepal there is no rule as on date regarding bacassurance. So, there is an agreement between insurance company and bank but it is not bancassurance. It is corporate agency agreement or the banks are corporate agents of the insurance company. This is a small fraction of what bancassurance service can provide but I see tremendous potential if the proper regulatory framework is prepared and implemented. The insurance business will explode after that and that is why, when I dream about that I get excited.

What is NICL's role going to be in order to increase the penetration of insurance in all parts of the country?

We want to insure those who need it the most and to fulfil that objective we surely need to increase our outreach. We will be using the technology to a greater degree for this, without technology increasing the outreach won't be possible and even if we managed to do it, it won't be cost effective.  Essentially, we are in the process of digitizing the insurance in Nepal because 85% of the population are in smart phones, even in those places where there is no electricity. So we will be repackaging our services to fit their capacity and we'll be focusing on a lot of innovation along with other companies to make our services viable for those who need it the most.

How has your experience been so far switching from NLG to NICL has NICL has government stake in it?

I'm a performer, so I keep running. So for me, ownership structure doesn’t matter. I'm a professional and whatever I do I do it thoroughly. The board has a role to play and as a captain of this company I have a role to play. My only mission is to spur this company to the next orbit. Nepal Bank is our institutional promoter with 15% stake, which makes them sort of like our captive insurer and this provides a lot of confidence to our customers/ clients.

How has your personal growth been in this industry given your involvement in variety of sectors? What are your major learnings? What do you want your legacy to be?

I keep on learning, and everything I've learnt has made me who I am today. So I can't say what is major or minor. Surya Nepal was my first school and the things I learnt there is still paying me dividends. I learnt about worshipping work and no work is small. When I started out, very few people were smoking Surya and my job was to change this situation so that when someone asked for a product they would take our brand's name first. The learning days are deep rooted in me and wherever I go it reflects in my personality.

When I joined the insurance industry the greatest challenge was taking insurance to the people who required it the most, who were more vulnerable and who didn't have the luxury of absorbing even small shocks in life. So I wanted to take my services to them and bring smile to their faces. If a person comes for a motorcycle insurance and wants to meet the CEO, I'm here and readily available. Even today I'm going to handover a health insurance claim to one of our insured at hospital, it might not be the entirety of what they need but we are doing what is under the purview of company. So I've learnt to connect with my customers, my board, my employee and everyone involved because I believe in the power of connectivity.

You were the president of 21^st AIRDC conference held in Kathmandu, how was your experience? What new responsibilities have been added on you?

AIRDC is the Association of Insurers and reinsurers in Developing Countries from Asia, Africa and Latin America. The insurance business is different in all countries, but why I got involved in AIRDC is because we have common problems. We have problems in increasing our outreach, increasing our capability and adopting the technology. These problems are common in all developing countries although scale could be different.

The AGM has unanimously elected me as the president. So I'm constantly in contact with all of them. Now, I have to propagate this not only in Nepal but in all countries and that is a big challenge. The agenda has come, so now I have to travel, speak, network and transform it into business proposition so that people will come in and see some meaning out of it. Until and unless we can make it commercially viable, these ideas will just remain ideas. So I have a great responsibility for the coming two years.

What would you like to say to all the young graduates out there?

Please do not stop learning. The day you stop learning thinking that you've learnt everything, from there the downfall will start. Keep running and keep walking and keep learning like the ad of Jonny Walker.

In addition to that, I want you to realize that no work is small. Respect your job, I'd rather say love your job. Keep learning and love what you do. This is what I'd like to say to the young graduates because when they enter market they carry a lot of ambition and because of that they easily get frustrated. So nothing is small in this world.