This document discusses insurance in Nepal and Prime Life Insurance. It provides an overview of the insurance industry and Prime Life Insurance, including key statistics on transactions. It also summarizes Prime Life Insurance's products and marketing strategies. The document then discusses concepts like the insurance process, imperfections, claim settlement, premium calculation, reinsurance and the role of underwriters.

1. Risk, Risk Management
and Insurance
Group Report on Prime
Life Insurance
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2. Group Members
• Chhitiz Shrestha
• Niraj Taujale
• Raj Shrestha
• Sheeba Maskay
• Zhang Peng
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3. Insurance in the Nepalese Context
• In the current scenario insurance business is playing
vital role of financing losses
• Over the last decade, Nepalese insurance industry
has undergone a substantial change, from being the
domain of nationalized players to attracting private
sector companies
• As the industry has changed, so too has the
important aspects like customer- provider relationship
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4. Insurance in the Nepalese Context
• In the last fiscal year, different insurance companies
registered a total transaction of Rs 14.4 billion
• Non-life insurance saw a transaction of Rs 6.5 billion
• Life insurance saw a transaction of Rs 8.9 billion
• 16 companies are providing non-life insurance
service while eight companies are providing life
insurance service
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5. Insurance in the Nepalese Context
• Transactions in billions
10
8.9
8
6.5
6
Life
4 4.4
Non- Life
2
0
2009 2010
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6. Insurance in the Nepalese Context
• Yet only as much as 8% of people are insured.
• The remaining 92% of people still do not have access
to insurance
• It is mainly due to unexplored rural areas which lack
access to the likes of insurance
8%
Insured
Uninsured
92%
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7. Prime Life Insurance at a Glance
• Came into existence in June 2007
• Share holding constitutes of 70 percent promoters
holding and 30 percent general public
• Laxmi Bank Limited, is one of the major promoters
with 15 percent stake
• Unprecedented achievement in the Nepalese Life
Insurance Industry by recording net profit of NPR
56.75 million in the first full year operation
• Recorded more than 370,566 policies in just 3 years
of operation
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8. Prime Life Insurance at a Glance
• Collected premium amounting to NPR 1,262 Million
• Increased its distribution network by opening 85
network points of representations all over Nepal
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9. Products offered by Prime Life
• PrimeLife Pension Plan
(Bhawisya Britti Bhuktani Jeevan
Beema)
• PrimeLife Saral Jivan
(Endowment Plan with profits)
• PrimeLife Dhan Sagar (Money
Back Policy with profits)
• PrimeLife Nari Jeewan Beema
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10. Products offered by Prime Life
• PrimeLife Swarnim(Child
Endowment with profits)
• PrimeLife Jivan Surakshya
(Whole Life Endowment with
profits)
• PrimeLife Karja Surakshyan
(Mortgage Redemption
Insurance)
• PrimeLife Baideshek Rozgar
(Foreign Employment Policy)
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11. Insurance Marketing System
• Mainly dependent upon
mass advertising
– The likes of Kollywood
Superstar Mr. Rajesh
Hamal is used to market
the insurance product
• Vast use of Call centers
as well
• Major corporations
insure all their staffs at
once
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12. Insurance Marketing System
• Besides that, the normal use of Insurance
Agents as well
• Others come to the insurance office themselves,
for specific kind of insurance
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13. Insurance Process
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14. Insurance Imperfections
• The Principle of utmost good faith
– It is generally applied, yet in case of minute necessities, it is
avoided.
– Eg. The place form where the man who is insured is not
examined with much vigor as what caused his accident.
• Agent/Staff Manipulation
– Although the company claims that the customers of another
company is off limits, however, if it is in the company's
interest it could attract staffs and agents from another
companies
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15. Insurance Imperfections
• Difference in risk calculation
– Although not an imperfection, risk is calculated separately
for separate individual
– Eg. A person with AIDS yet good financial backing and
healthy habits may have to pay less premium then a person
with AIDS but insecure finance and unhealthy habits.
– Thus, risk for each person is calculated uniquely.
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16. Claim Settlement Process
• A claim is the payment made by the insurer to the
insured or claimant on the occurrence of the event
specified in the contract, in return for the premiums
paid for the insured.
• Based on information, Assessment and Decision
• While asking for requirements the company
considers
– The Sum at risk
– Cause
– Circumstances of claim
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17. Claim Settlement Process
• Eg. For accidental death, specific proofs such as
Post Mortem and Police Report are required
whereas for death due to illness, the Company calls
for records from hospital, test reports, etc.
• The nominee (in case of minor nominee) last
recorded under the Policy in case of Policy on own
life.
• The proposer in case the Policy is not on own life.
• Assignee in case the Policy was assigned.
• Life Assured himself in case of policy on own life for
living benefit claims (Eg Critical Illness rider)
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18. Calculation of Premium
• Based on Occupation
– People with riskier jobs pay more amount of premium
• Based on Financial hazard
– Risk also depends upon jobs a person undertakes and
his commission
• Based on Moral Hazard
– Primarily based on morals and motives of people
– People in various regions have to face various risks
thus, risk also changes
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19. Calculation of Premium
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20. Scope of Re-insurance
• Re-insurance still lacks a proper scope in Nepal
• It is mainly due to:
– Poor Economy of our country
– Unstable political condition
– Lack of developmental activities
– Lack of investment
• Hence a re-insurance company cannot sustain in
Nepal.
• Finally, an economy like ours would not be able
to sustain a collapse of a re-insurance company
• So, all re-insurance is done abroad
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21. The Role of the Underwriter
• Studying various insurance proposals;
• Gathering and assessing background
information;
• Calculating possible risk and deciding how much
individuals or organizations should pay for
insurance (the premium);
• Deciding whether the risk should be shared with
a re-insurer;
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22. The Role of the Underwriter
• Computing results for appropriate premiums
using actuarial information, other statistics and
own judgment;
• Visiting brokers or potential customers and
preparing quotes;
• Writing policies;
• Keeping detailed records of policies underwritten
and decisions made.
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23. The Role of the Underwriter
• Liaising with specialists, such as surveyors or
doctors, for risk assessment;
• Gathering information and various types of
reports (e.g. medical records) from specialists;
• Specifying conditions to be imposed on different
types of policies, for example, asking that a
property owner install a security alarm;
• Negotiating with brokers and drawing up
contracts;
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24. The End
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25. Special Thanks
• Mr. Subin Shrestha (RRMI Instructor)
• Mr. Kishor Lamichane (Underwriter - PLI)
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