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Our Company Profile

 

COMPANY PROFILE: BACKGROUND AND CORPORATE OVERVIEW

 

  1. Company Information

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 Gyaneshwor, Kathmandu and it is operating its business through various service 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. We are proud to be the local insurance partner of AIG (American International Group).

  1. Strategic Objectives

The main objectives of the company are:

  • To “MAKE A VISIBLE DIFFERENCE” in insurance market by providing best general insurance services nation-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
  1. Capital Structure

The paid up capital of the company is NPR 1,317,431,808.00 as on 15th July, 2020. In terms of capital, Neco Insurance Ltd is the leading insurance company of general insurance sector. The shareholding patterns of the company are 51% of Promoters and remaining 49% of public. The major promoters of the company are:

  • Rastriya Banijya Bank Ltd.(RBB)
  • Citizen Investment Trust
  • Agriculture Development Bank Ltd.
  • Mahato Group
  • Fund Management Company Ltd.
  • VinayakGroup
  1. Support Team

To support the operational activities, prudence in claim and technical risk analysis, we have outsourced the support team comprising of qualified Chartered Accountants, Doctors and Engineers which also supports management.

  1. Branch Network

With the strategic vision of aggressive growth in business and provide better and quality service to client, Neco has established efficient and effective expansion of footprint all over the Nepal. Company has altogether 74 networks all over the Nepal with 32 branches, 41 sub-branches and 1contact office. Further, company is planning to extend 10 branches all over the Nepal in this fiscal year.

  1. Recent Market and Regulatory Development Impact on Company

There are altogether 20 non-life and 19 life insurance companies running in the country. The overall, life as well as general, insurance business in Nepal is at growing phase. The present insurance market of Nepal is around USD 273,866 thousand in general insurance. On an around 20% average annual growth rate has been accounted over the past 5 years in insurance sector.

 

OPERATING AND UNDERWRITING REVIEW


Line of Business

The company underwrites all types of general insurance risk through different kinds of policies prevailing in the market under seven major categories i.e. Property, Motor, Aviation, Marine, Engineering, Agriculture, Miscellaneous.

  1. 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 level management. Sometimes, the opinions of experts are also sought on technical matters to know the depth of risk in the policies.

  1. 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.

  1. Business: Portfolio-wise

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

Amount in NPR ‘000’

Portfolio

F.Y. 2018/19

F.Y. 2019/20

F.Y. 2020/21

 

 

Audited

Audited

Audited

 

 

Nos.

Amount (RS)

Mix

Nos.

Amount (RS)

Mix

Nos.

Amount (RS)

Mix

 
 

Fire

52,179

4,882.39

25%

54,258

565,528.45

27%

71,841

672,625.70

28%

 

Motor

195,510

9,074.73

47%

167,891

927,866.18

45%

193,359

1,029,279.17

43%

 

Aviation

0

                    -  

0%

1

                        33.40

0%

1

         118.34

0%

 

Marine

7,820

            494.66

3%

5,734

                 49,190.54

2%

10,426

    73,089.15

3%

 

Engineering

3,737

2,062.11

11%

4,099

314,370.03

15%

4,187

313,222.32

13%

 

Miscellaneous

13,490

2,139.02

11%

14,747

165,445.01

8%

19,714

224,578.68

9%

 

Agriculture

3,988

            509.65

3%

1,476

                 51,264.96

2%

3,201

  102,550.83

4%

 

Total

276,724

19,162.56

100%

248,206

2,073,698.57

100%

302,729

2,415,464.19

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. Due to large scale infrastructure development in the country, there is more scope for engineering business

 

  1. Business: Growth Rate

The comparative growth rate is presented below:

Portfolio

F.Y. 2017/18

F.Y. 2018/19

F.Y. 2019/20

F.Y. 2020/21

Audited

Audited

Audited

Audited

Policy 

Premium

Policy 

Premium

Policy 

Premium

Policy 

Premium

Fire

28%

28%

16%

19%

4%

16%

32%

19%

Motor

33%

30%

-4%

13%

-14%

2%

15%

11%

Aviation

-12%

-28%

-100%

-100%

100%

100%

0%

254%

Marine

13%

17%

68%

48%

-27%

-1%

82%

49%

Engineering

4%

2%

7%

-10%

10%

52%

2%

0%

Miscellaneous

37%

6%

21%

60%

9%

-23%

34%

36%

Agriculture

60%

96%

66%

54%

-63%

0%

117%

100%