Non-life insurances - Nepal

Nepal

The Non-life insurance market in Nepal is projected to reach a market size (gross written premium) of US$1,798.00m in 2024.
On average, each person in Nepal is expected to spend US$57.56 on Non-life insurance in 2024.
The gross written premium is anticipated to grow at an annual rate of 3.47% (CAGR 2024-2028), resulting in a market volume of US$2,061.00m by 2028.
In comparison to other countries, the United States is expected to generate the highest gross written premium in 2024, amounting to US$3,371.0bn.
The non-life insurance market in Nepal is witnessing a growing demand for property and casualty insurance products due to increased infrastructure development and urbanization.

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Analyst Opinion

The Non-life insurances market in Nepal has been experiencing steady growth in recent years.

Customer preferences: Customers in Nepal are increasingly seeking non-life insurance products to protect their assets and properties against various risks. The demand for motor vehicle insurance has been on the rise as more people are purchasing cars and motorcycles. Additionally, there is a growing interest in health insurance policies to cover medical expenses and ensure financial security in case of emergencies.

Trends in the market: One noticeable trend in the Nepalese non-life insurance market is the introduction of innovative insurance products tailored to the needs of specific customer segments. Insurers are offering customized policies that provide comprehensive coverage at affordable premiums. Moreover, there is a shift towards digitalization, with more insurance companies leveraging technology to enhance customer experience and streamline operations.

Local special circumstances: Nepal's geographical and climatic diversity poses unique challenges for the non-life insurance sector. The country is prone to natural disasters such as earthquakes, floods, and landslides, making property insurance a crucial investment for individuals and businesses. Insurers in Nepal are adapting their product offerings to address these specific risks and provide adequate coverage to policyholders.

Underlying macroeconomic factors: The overall economic development in Nepal, coupled with increasing disposable income levels, has contributed to the growth of the non-life insurance market. As more people are able to afford insurance premiums, the penetration of non-life insurance products is expected to continue expanding. Additionally, regulatory reforms and initiatives aimed at promoting insurance awareness are creating a favorable environment for market growth.

Methodology

Data coverage:

Data encompasses B2B and B2C enterprises. Figures are based on gross written premium, gross written premium per capita, gross claim payments, loss ratio, and distribution channels.

Modeling approach / Market size:

Market sizes are determined by a Bottom-Up approach, based on a specific rationale for each market layer. As a basis for evaluating markets, we use industry associations, national statistic offices, and international organizations, such as OECD. Next we use relevant key market indicators and data from country-specific associations such as insurance consumer spending, gross domestic product, insurance - consumer price index (CPI), population growth. This data helps us to estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the particular market. For example, exponential trend smoothing and HOLT-linear. The main drivers are insurance consumer spending and insurance - consumer price index (CPI).

Additional Notes:

The market is updated twice per year in case market dynamics change. The impact of the COVID-19 pandemic is considered at a country-specific level.