Non-life insurers' profits fell 39% before the Bhotekoshi flood brought Rs 25.9bn in claims

Nepal's non-life insurers had a poor year even before the Bhotekoshi river burst its banks in late August. The 14 companies earned a combined net profit of Rs 2.79bn in the 2025/26 fiscal year, down 39.21% from Rs 4.59bn, Ratopati reported from their fourth-quarter results. Only one company, Prabhu Insurance, increased its profit, by 19.71% to Rs 246.4m. National Insurance made a loss of Rs 131m, and IGI Prudential's profit fell 98.89% to about Rs 4m.

The flood on 26 August then produced a new wave of claims, while insurers are still settling those from the unrest of September 2025.

The size of the bill

By early September, 583 policyholders had filed preliminary claims worth Rs 25.87bn (about $167m) with 15 non-life insurers, Beema Post reported from Nepal Insurance Authority data. Engineering and contractors' risk policies, the cover used for hydropower projects and other construction, accounted for Rs 20.51bn of that, from just 52 policyholders.

The exposure is concentrated. Oriental Insurance faces claims of Rs 13.04bn from only eight policyholders. Its entire business in 2024/25 was Rs 2.70bn, Beema Post reported last year. United Ajod Insurance faces Rs 4.97bn, Sanima GIC Rs 2.10bn, Siddhartha Premier Rs 1.89bn and Shikhar Rs 1.88bn. For scale, the whole non-life industry wrote about Rs 44.38bn in premiums in the eleven months to mid-June, according to ShareSansar.

The damage itself was mostly to power plants. At least 13 hydropower projects were hit, including the 111MW Rasuwagadhi plant, which the Nepal Electricity Authority said had been completely washed away, The Kathmandu Post reported. Online Khabar put the affected capacity at about 900MW and investment losses at Rs 180bn. The energy side of the story is covered in our report on the Rasuwa flood.

Whether the projects were insured was an early question. "It is rare for hydropower projects to be uninsured. All projects under construction are generally insured," Sushil Dev Subedi, executive director of the Nepal Insurance Authority, told the Post. The president of the Independent Power Producers' Association said all private projects had cover. The non-life insurance sub-index on the stock exchange fell 3.9% over two sessions after the flood.

Advances and reinsurance

The finance ministry has asked insurers to pay advances of up to 50% of assessed losses based on preliminary reports, and reinsurers will extend the same advances to insurers, Beema Post reported. A monitoring unit will track claims daily and chase reinsurance reimbursements, and foreign surveyors may assess complex infrastructure, Online Khabar reported. "Let's join hands in this difficult time," Finance Minister Swarnim Wagle said.

Reinsurance arrangements will shape how much of the bill each insurer bears. From 17 July, the government reinstated a rule requiring insurers to cede 20% of their direct business to the state-backed Nepal Reinsurance Company, which had been receiving about 6%, Beema Post reported.

The industry's balance sheets were stronger than its profits. The average solvency margin rose to 4.35% from 4.16% in the year to mid-July, against a regulatory minimum of 1.5%, Beema Post reported, although Oriental, the most exposed insurer, had the lowest ratio at 2.73%. Non-life insurers sold 3,001,814 policies in the year, up from 2,757,674.

What to watch

The key numbers are how much of the Rs 25.87bn survives loss adjustment and how quickly reinsurers pay. First-quarter results for 2026/27 will show how much insurers retain on their own books. Online Khabar reported that the government has pledged support if insurers face liquidity problems.