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Our Company Profile

Company Info

Neco Insurance Ltd. is a limited liability company registered under the Companies Act, 2021 BS. It was established on 1stPoush, 2051(16th December, 1994). It has been operating general insurance business in Nepal since 17thJestha, 2053 (30th May, 1996) as per the license granted by Insurance Board of Nepal. The registered office of the company is at Anamnagar, Kathmandu and it is operating its business through 27service outlets nationwide.Neco Insurance enjoys a reputation of expertise,stability and strength. Our competitive edge,extensive range of products,wide network,claim servicing capabilities and the ability to provide all possible general insurance solutions under one roof, makes us the most preferred partner for our valued customers. Neco Insurance has been known in the market as being innovative and having a well-established relationship with the various reinsurance markets of the world.

Strategic Objectives

The main objectives of the company are:

  • To “Make A Visible DIFFERENCE” in insurance market by providing best general insurance servicesnation-wide.
  • To be the first and final choice of customers of every business segment of the country.
  • To ensure that all stakeholders achieve a long-term, competitive and stable return.

Capital Structure

The authorized capital of the company is NPR 1000 million and the issued capital is NPR 648 million. The current paid up capital of the company is NRs. 324 million. The 20th AGM of the company has announced right share @1:1 ratio, which increases paid up capital of up toNPR 648 million soon. In terms of capital, Neco Insurance Ltd will be leading insurance companies of general insurance sector. The shareholding patterns of the company is as under:

Promoters Holding

60%

Public Holding

40%

The company is promoted by mainly renowned institutions of the country. Thus, the credibility of the company is not comparable with others in insurance market. The major promoters of the company are as under:

  1. Rastriya Banijya Bank Ltd.(RBB) - Holds 20% of total share

  2. Mahto Group: Holds 20.24% of total share

  3. Vinayak Group:Holds 12.94% of total share

  4. Fund Management Company Ltd: Holds 4.51% of total share

 

 Recent Market and Regulatory Development Impact on Company

There are altogether 17 non-life and 8 life insurance companies running in the country. The overall, life as well as general, insurance business in Nepal is at growing phase. Around more than 25% average annual growth rate has been accounted over the past 5 years in insurance sector.

The regulatory body of insurance business in Nepal is Insurance Board (Beema Samitee). It has issued directive on the "Corporate Governance" for the insurance companies which focused to protect interest of stakeholders mainly insured, staffs and investors.As per the regulator directive, the minimum paid up capital of non-life insurance should be NRs. 250 million, which is supposed to be increased very soon. The Board has introduced Agriculture and Cattle Insurance policies to assist in commercial agriculture, a plan being implemented by Government of Nepal through budget of recent fiscal years.

 

OPERATING AND UNDERWRITING REVIEW

Line of Business

The company underwrites all types of general insurance risk through different kind of policies prevailing in the market under seven major categories:

i)Fire,   ii) Motor, iii) Aviation,  iv) Marine, v) Engineering, vi) Agriculture and vii) Miscellaneous

Underwriting Approach

There is a separate Underwriting Department in the company. The department accepts the proposals submitted by marketing agents and staffs after deliberate evaluation of underlying risk in the proposal. The decision in major cases is taken by the combined team of higher lever management. Sometimes, the opinions of experts are also sought on technical matters to know the depth of risk in the policies.

In case of proposals with higher amount of sum insured than the retention limit of company, the policy is issued after the proper reinsurance arrangement of the risk as ascertained by the reinsurance department. Similarly, some policies with high value sum insured are issued in combination of other insurance companies under the principle of coinsurance. In conclusion, the company has established adequate controls and guidelines over the risk evaluation on proposals before issuing the final policy.

Historical Growth and Distribution

The company prepares Budget every year to set the business target as well as to monitor the operating expenses throughout the fiscal year. The budget is prepared and duly approved by the board of directors of the company. It works as a plan of action for the running year. Every possible effort is made to achieve the target set in the budget and control the expenses within the allocated limit. The growth in business is set considering industry growth rate, business potential in the overall market, own expansion plan and so on. The growth in business is set in all portfolios but in varying degree of increase so as to maintain an optimum business ratios for all portfolios. Efforts are made to increase the most profitable line of business like Fire portfolio to generate sound underwriting profit.

Business: Portfolio-wise

The business mix for the different portfolios for the last three years is tabulated as under:

 

Portfolio

F.Y. 2013/14  Audited

F.Y. 2014/15 Audited

F.Y.2015/16 Audited

 No. of
Policies

Amount

In NPR "000"

Mix

 No. of
Policies

Amount in NPR "000"

Mix

 No. of
Policies

Amount in NPR "000"

Mix

 Fire

 21,726

149,567

33%

 25,036

188,123

35%

32,217

262,008

29%

 Motor

 16,705

167,778

37%

19,026

162,568

31%

81,948

326,029

36%

 Aviation

8

4,233

1%

82

37,433

7%

33

28,882

3%

 Marine

997

10,369

2%

1,133

8,077

2%

2,775

13,626

2%

 Engineering

912

53,220

12%

960

47,666

9%

1,933

156,791

17%

 Miscellaneous

3,765

66,230

15%

4,449

82,872

16%

6,460

110,512

12%

Agriculture

63

117

0%

496

4,462

1%

888

9,919

1%

Total

44,176

451,514

100%

 51,182

531,200

100%

126,254

907,767

100%

 

Motor portfolio has been increased since we are approaching big corporate sector for large volume motor business. If the business is materialized it will certainly increase our motor portfolio. Further, engineering portfolio is also increased since due to earthquake last year, government is going to allocate huge sum for infrastructure development in the country. Due to large scale infrastructure development in the country, there is more scope for engineering business. 

 

 Business: Growth Rate

The comparative growth rate is presented below:

Portfolio

F.Y. 2013/14 
Audited

F.Y. 2014/15
Audited

F.Y. 2015/16 Audited

 Policy

Prem

Policy

 Prem

Policy

Prem

 Fire

4%

11%

15%

26%

29%

39%

 Motor

36%

9%

14%

-3%

331%

101%

 Aviation

100%

100%

925%

784%

-60%

-23%

 Marine

7%

33%

14%

-22%

145%

69%

 Engineering

-5%

-1%

5%

-10%

101%

229%

 Miscellaneous

-10%

6%

1086%

25%

45%

33%

Agriculture

100%

100%

687%

3721%

79%

122%

Total

12%

9%

16%

18%

147%

71%

Hence, business growth is in increasing trend each year. In current year optimum growth of 57% has been achieved.