by: Mosleh Ahmed FCA
Director, The Professional Consortium, Sri Lanka and CEO, Microinsurance Research Centre, UK
The objective of this paper is to explore the development of agricultural insurance microinsurance in Nepal. The paper further discusses the agricultural insurance and microinsurance products available in the country and the policies practices of the commercial insurers in the country.
Country Overview
Nepal, a landlocked multiethnic, multilingual, multi-religious country, is situated in the Himalayan mountain region. The country can be divided broadly into three ecological zones: the lowland, the midland and the mountain or highland. The mountain region accounts for about 64 percent, the midlands account for around 19 percent and the lowland Terai occupies about 17 percent of the total land area of the country. In the midland and highland regions, the terrain is rugged, rainfall is low and the poor-quality soil is difficult to farm. Agricultural landholdings per household in these areas are the smallest in the country.
With a Gross Domestic Product (GDP) of NPR 1,599,172 million (per capita GDP NPR 60,119) and with 31 percent of the 26.6 million population of Nepal living below the poverty line, poverty still remains a major development problem in the country[1]. Nepal ranks 157 out of 186 countries in the UN Human Development Index[2]. While the overall poverty rate for Nepal is 25 per cent, this figure increases to 46 percent in the highland region and 45 per cent in the midland region. Poverty is much more severe in rural areas (35 percent) compared to the urban areas (10 percent). About 80 percent of the rural population aged 15 and above is engaged in agriculture[3].
Over 30 percent of Nepal’s population lives on less than NPR 1,330 per person per month[4]. A majority of the rural households have little or no access to primary health care, education, safe drinking water, sanitation or other basic services. Poor families are often obliged to send their children to work rather than to school, perpetuating the cycle of poverty. About one-quarter of children in Nepal are engaged in some kind of family or wage labour.
The total number of households in Nepal is 5.7 million and an average household has 4.7 members[5]. Poor rural people in Nepal generally have large families, very small landholdings or none at all, and high rates of illiteracy. They are also concentrated in specific ethnic, caste and marginalised groups, particularly those of the lowest caste (Dalits), indigenous peoples (Janajatis) and women. Population density in the country varies according to altitude – averaging more than 1,000 persons per square kilometre (km2) in the Terai region, about 300 persons per km2 in the midland region and as few as 30 persons per km2 in the highland region[6].
Agricultural sector landscape
The Nepalese economy is primarily agriculture based. About 80 percent of Nepal’s population lives in rural areas and depend on subsistence farming for their livelihoods; most of the rural population is smallholders. The per capita GDP in the agricultural sector is even lower – approximately NPR 13,300 per agricultural worker[7].
Nepal has 4.1 million hectares of agricultural land out of which 3.1 million hectares is under cultivation and 1.0 million hectares is uncultivated[8]. Land ownership in Nepal has traditionally been concentrated in a feudal system. For most poor rural families, access to land is extremely limited. Almost 70 per cent of households have holdings of less than 1 hectare[9] and many depend on plots that are too small to meet their subsistence requirements. Productivity levels remain low as a result of limited access to new farming technologies, inputs and extension services.
Lack of economic opportunity in the country has prompted many of the productive members of rural households to migrate from Nepal in recent years. Nepal is one of the world’s highest per capita recipients of overseas remittances, which totalled some US$5.1 billion in 2012[10]. Yet almost 80 percent of remittance income is used for daily consumption, and 7 percent is used for loan repayment. Less than 3 percent of all remittances are used for capital formation.
The Nepali agricultural sector is based on the production of basic staple grains. About 82 percent of cultivated area is planted with cereal crops, which contribute only about 30 percent of agricultural GDP, while export crops contribute about 50 percent. Since the share of high-value crops in total cultivated area is still small, the desired process of agricultural diversification is hardly noticeable at the aggregate level. Therefore, the rural areas suffer from slow growth, rising poverty and food insecurity, and subsistence level of agriculture. Trade often occurs in local markets that are subject to gluts and price crashes. Storage and transportation facilities are poorly developed.
As a result of climate change, Nepal is fast becoming a disaster hotspot, with natural hazards increasing over the past three decades. Floods, landslides, fire, cyclonic winds, hailstorms, drought and famine are among the disasters gripping the country with increasing ferocity. In addition, there is a serious threat of an earthquake, particularly in the capital, Kathmandu. Records show that a quake occurs every 75 years in the city, with the last one in 1934 when 3,400 people died. Another big one is expected within a few years in the range of 8.1 to 8.3 on the Richter scale, which could kill at least 40,000 people and render 900,000 homeless.
According to the Nepal Inter-Agency Standing Committee (IASC), a forum for coordination and decision-making among key UN agencies and Non-Governmental Organisations (NGOs), in the past 30 years there were 78 natural disasters affecting over 5 million people and causing nearly US$ 2.0 damages to their property and assets. Notable events are floods (2004, 2007 and 2009), earthquake (1980 and 1988) and draught (2009). The disasters frequently damage livelihoods and properties, limiting development in the country.
Realising the paramount role of enhancing access to microinsurance services to address risks and vulnerability of poor and limited involvement of mainstream insurance companies to offer pro-poor services, the Government of Nepal (GoN) and Beema Samiti (BS) have taken several positive steps to find insurance solutions.
Development and agricultural insurance and microinsurance in Nepal[11]
Nepal’s insurance history dates back almost seven decades. Until 2004 B.S. (1947) only Indian insurance companies were engaged in providing insurance services in the country. The first Nepalese insurance company, Nepal Mal Chalani Tatha Bima Company Ltd., was established in 2004 B.S. (1947) with an authorised capital of NPR 500,000 to conduct non-life business. The name was later changed to Nepal Insurance and Transport Company Pvt. Ltd. in 2016 B.S. (1959), and once again renamed as Nepal Insurance Company Ltd in 2048 B.S. (1991). The life insurance business started in 2029 B.S. (1972) with the establishment of Rastriya Beema Sansthan (RBS)– a government-owned insurance company, which now offers both life and non-life insurance. The first private insurance company in Nepal was National Life and General Insurance Company Private Limited established in 2043 B.S. (1986).
The insurance sector in Nepal is governed by the Insurance Act 2049 B.S. (1992) and Insurance Regulation 2049 B.S. (1993) and is regulated by Beema Samiti (BS), a GoN appointed body having its own Board of Directors, comprised of representatives of various government ministries and other representatives nominated by the government. The Insurance Act and the Insurance Regulation require segregation of life and non-life businesses into separate companies and spells out various prudential norms, good governance standards and operating rules for insurance companies.
At present, there are 24 private insurance companies (15 non-life, 8 life and 1 composite) and one state-owned company (composite) in Nepal. Of the private non-life insurance companies, at present 12 are offering livestock and 2 are offering crop insurance in the country. The state-owned insurance company, RBS, has not entered the agricultural insurance market. There is no reinsurance available for agricultural insurance in Nepal. Only one insurer has been able to persuade its reinsurers to provide reinsurance coverage for its livestock portfolio but it does not have any coverage on its crop portfolio. In absence of reinsurance facility, three groups of insurers have formed a risk pool amongst themselves to share the cost in the event of any catastrophic events.
Agricultural insurance
Around 1.67 million people in Nepal are reached by Microfinance Institutions (MFIs), Co-operatives (co-ops) and Savings and Credit Cooperatives (SACCOs), and form a very special niche for the insurance market[12]. There are 24 licensed Microfinance Development Banks (MFDBs), 45 licensed Financial Intermediary Non-government Organisations (FINGOs), 16 licensed SACCOs and more than 5,000 non-licensed SACCOs currently working with the poor to enhance access to finance for the base-of-the-pyramid segment of Nepal. Most of these organisations offer insurance for their borrowers. They provide credit-linked insurance and charge 1 percent of the total loan as premium at the time of loan disbursement. Farmers use these loans for purchase of livestock or crop farming. There is no comprehensive list of the organisations and the products being offered but it is estimated that around 80 percent of MFIs, co-ops and SACCOs offer some kind of agricultural insurance or credit/life insurance. Because they are not insurance companies, the Insurance Board (BS), does not regulate the organisations or their products. Government’s premium subsidy is not available to these organisations.
Agriculture production depends on the weather; drought and excess rainfall, hail and frost, landslide and flood, pest and insect are risks faced by the farmers in Nepal. Conventional insurance policies in Nepal do not address these risks.
In January 2013, GoN introduced crop and livestock insurance directives (CLID) to encourage insurance companies to develop commercial agricultural insurance. The objective is to offer farmers and investors in the agricultural sector the tools to reduce the risks associated with loss/damage resulting from situations beyond control such as flood, landslide, drought, excess rainfall, hailstones, snowfall, frost, diseases/pests, earthquake, etc. The major provisions of CLID are:
- Under crop insurance, the sum assured is equal to the cost of production (seed, seedlings, fertilisers and labour cost until the crops/horticulture are ready for harvest.
- Livestock and poultry insurance will provide coverage to all types of cows, oxen, buffalos, male and female yaks, sheep, goat, pig, chicken, swan and ducks based on sum insured fixed by BS. Upper and lower ceilings of risk cover, age limit and amount of premium and commission are specified clearly.
- 90 percent of the covered loss is to be borne by the insurance company and 10 percent by the policyholder.
- Insurance is for 12 months. In case the insured plant, animal or fowl has a lifespan of less than 12 months, then the premium amount will be calculated based on the shorter life cycle.
- Claims must be settled within 30 days from the first reporting date.
- For livestock all risks are covered in the event of death; in the case of permanent total disability, 50 percent of the sum assured is paid. Deaths not reported within 3 days, missing livestock and theft are excluded.
- For poultry/birds, the risks covered are fire, lightning, flood, inundation, landslide, subsidence, storm, hail storm, snow, frost, illness and diseases.
- Crop insurance risks covered are fire, lightning, flood, inundation, landslide, subsidence, storm, hail storm, snow, frost, diseases, pests and insects.
CLID makes it obligatory for all non-life insurance companies in Nepal to offer agricultural insurance, but the authorities have not aggressively enforced this obligation in order to let insurance companies adapt and learn. They also have not specified a minimum number of policies that have to be sold by the insurers. CLID also offers guidelines for the product design such as sum assured, premium and commission that the insurance companies can use. Insurance companies are also free to submit their own schemes for approval by BS. 12 out of 17 non-life insurance companies are now offering livestock insurance, covering cows, oxen, buffalos, male and female yaks, sheep, goat, pig, chicken, swan and ducks, and 2 companies are offering crop insurance, covering bananas, coffee and tomatoes.
GoN introduced a subsidy on the premium in June 2013. Initially, the subsidy was 50 percent and this was raised to 75 percent in August 2014. The maximum sum assured per person/entity for this subsidy program is NPR 10 million. GoN allocated NPR 135 million in the budget for subsidies in the fiscal year 2013-2014; however, its utilisation is extremely low as the insurance companies are struggling to increase the outreach of agricultural insurance. The subsidy would be gradually phased out after some time.
As per tariff, livestock sum assured for cows vary from NPR 30,000 to 150,000, for buffalos from NPR 30,000 to NPR 125,000, for Yak from NPR 12,000 to NPR 80,000 for sheep, goats and pigs from NPR 8,000 to NPR 10,000. The premium payable is 5 percent of the sum assured; GoN pays 75 percent of the premium. All risks are covered; in the event of death, 90 percent of the sum assured is paid and in the case of permanent total disability, 50 percent of the sum assured is paid. Deaths not reported within 3 days, missing livestock and theft are excluded.
For poultry/birds, the sum assured varies from NPR 400 to NPR 1,200. The premium payable is 6 percent for commercial and 5 percent for domestic birds; the government pays 50 percent of the premium. Risks covered are fire, lightning, flood, inundation, landslide, subsidence, storm, hail storm, snow, frost, illness and diseases.
The government owned Deposit Insurance and Credit Guarantee Corporation (DICGC) also offer livestock insurance in the form of guarantee to the commercial banks making livestock loans. It is regulated by Nepal Rastra Bank, the central monetary authority. DICGC has been protecting livestock loans since 1987; it charges 4 percent premium of total value to clients and gets another 4 percent premium subsidy from the government to protect the loans of small borrowers of banks, FINGOs and SACCOs. This subsidy program is separate from the insurance companies’ subsidy scheme and is not scheduled to stop anytime soon. This insurance product covers loans and not the value of the animal. When the loan is repaid, the insurance contract stops. The animal must be inspected by a veterinarian and be issued a health certificate. The animal must also be ear tagged. The policy indemnifies the insured livestock owner against (i) the death of the insured animal or (ii) loss of use of the animal as determined by an authorised technician.
Though livestock insurance is not new in Nepal, it is a very new activity for private insurance companies. Before 2013, none of them were involved in this sector and they lack expertise in agricultural risk management. However, claims data and risk experience of DICGC are available for them and can be used to assess the risk involved in this sector. The insurers see livestock insurance as a more valuable product and easier to monitor than crops.
On the other hand, crop insurance is very new in the country; the industry and the farmers do not have previous experience to go by. Before CLID, a few MFIs, cooperatives and seed suppliers offered informal crop insurance in a very limited way. Crop insurance has not as yet made any appreciable inroad in Nepal. The two insurers that started offering crop insurance after CLID have only 56 policyholders between them.
Microinsurance
Poor people are more vulnerable so that they face more risks than non-poor people. Insurance is an effective tool of poverty reduction in developing countries. The importance of microinsurance is multifold in a developing country like Nepal, where more than 80 percent people live in rural areas and most of them are farmers and their means of livelihood is subsistence farming.
Microinsurance schemes offered by MFIs, Co-ops and SACCOs in Nepal are social protection fund products (SPF), life, credit/life, healthcare, accident/disability, livestock and crop insurance. SPF products are insurance-like informal risk protection products offered by MFIs and offer protection to their clients for a broad array of risks such as the death of the client, death of client’s spouse or close family member, maternity benefits and losses due to damages to the clients’ dwellings caused by natural calamities. Some products also cover predefined illnesses and some cover pre-existing illnesses. The products are available both in rural and urban areas, though the majority of the hill and mountain districts are not covered[13].
In June 2010, BS drafted a Micro Insurance Act and forwarded it to the Ministry of Finance (MoF) for approval. There was political instability in the country at that time and the ministry did not give this issue a priority and it was not approved. The draft act incorporated numerous prudential norms and tightened corporate governance norms for microinsurance operation. The draft act contained three major policy level changes, which were:
- Allow life insurance companies to introduce pension schemes
- Allow general insurance companies to carry micro insurance products
- Pave the way for establishment of reinsurance companies
In March 2011, BS formed a committee to identify suitable microinsurance products and the best distribution channels to reach the low-income households in rural and urban areas. The committee recommended six microinsurance products needed by the low-income households, which are tabulated below:
Table 1: Microinsurance products
| PRODUCTS | MAXIMUM SUM ASSURED (NRP) | PREMIUM AS % OF SUM ASSURED | DISTRIBUTION CHANNEL | COMMISSION AS % OF PREMIUM | |
| 1 | Agriculture[14] | 100,000[15] | 5%[16] | Co-op, MFI, CG | 15% |
| 2 | Micro Health | 30,000[17] | 2% | Co-op, MFI, CG | 15% |
| 3 | Accident | 100,000 | 0.10% | Co-op, MFI, CG | 15% |
| 4 | Self-employment | 100,000 | 0.15% | Co-op, MFI, CG | 15% |
| 5 | Life with Endowment | 50,000 | As per age | Co-op, MFI, CG | Existing provision |
| 6 | Term Life | 100,000 | As per age | Co-op, MFI, CG | Existing provision |
In October 2011, MoF asked BS to identify 10 rural districts for microinsurance pilot microinsurance. The districts were duly identified by BS but piloting could not be implemented due lack of support from insurers and district level administration.[18]
In July 2012, BS developed a new draft Micro Insurance Regulation and forwarded it to MoF for approval. MoF has not as yet approved the draft act and it is difficult to anticipate if and when the parliament will pass the Act, and therefore BS decided to regulate microinsurance through Directives.
In April 2014, BS completed the draft of the Micro Insurance Directives (DMID) 2071 and submitted this to its Board of Directors for approval. This was approved in October 2014 and it is now operational as Micro Insurance Directives 2071 (MID). It is expected that the MID will boost development of microinsurance in Nepal.
Table 2: Micro Insurance Directives 2071 -Type, Premium and Commission
| TYPES OF MICROINSURANCE | MAXIMUM SUM ASSURED | PREMIUM AS % OF SUM ASSURED | COMMISSION AS % OF PREMIUM | MINIMUM AGE AT ENTRY | MAXIMUM AGE AT ENTRY | |
| Micro Non-Life Insurance Business | ||||||
| 1 | Family
Micro Insurance |
200,000 NPR | 0.25 | 15% | – | – |
| 2 | Health Family Micro
Insurance |
35,000 NPR | 4.0 | 15% | As per rules of insurer | As per rules of insurer |
| 3 | Accident
Micro Insurance |
150,000 NPR | 5.0 | 15% | – | – |
| 4 | Livestock
Micro Insurance |
150,000 NPR | 5.0 | 15% | – | – |
| 5 | Crops Micro Insurance | 50,000[19] NPR | 5.0 | 15% | – | – |
| 6 | Other micro non-life insurance as determined by Samiti | |||||
| Micro Life Insurance Business | ||||||
| 7 | Term Micro Life Insurance | 150,000 NPR | According to age | As determined | According to rules of insurer | According to rules of insurer |
| 8 | Endowment Micro Life Insurance | 100,000 NPR | According to age | As determined | According to rules of insurer | Accroding to rules of insurer |
| 9 | Whole Life Micro Life Insurance |
NO DETAILS AVAILABLE |
||||
| 10 | Other micro life insurance specified by Samiti | |||||
MID covers both microinsurance and agricultural insurance. The issues relating to agricultural insurance have been discussed under Agricultural Insurance chapter above. Except for credit-life insurance through MFIs and cooperative by three out of the eight life insurance companies, the regulated insurers in Nepal do not offer any other microinsurance products. The main reason for this is the absence of microinsurance regulation until now.
MID defines microinsurance, life microinsurance and non-life microinsurance; it makes mandatory for every regulated insurance company in Nepal to operate microinsurance business. It identifies microinsurance products, caps the sum assured and the premium payable, states commission payable, claim settlement procedure and reporting requirements for the insurers. It also describes microinsurance agents’ qualifications, training and remuneration. One of the commendable features of MID is that it defines ‘microinsurance agent’ and under that allows NGOs, FINGOs, self-help groups and MFIs to act as micro insurance agent. Many of the above details are not given for Whole Life Micro Life Insurance product in the MID.
Gaps, key lessons and challenges
Both CLID and MID covers agricultural insurance and there are discrepancies between coverage mentioned in CLID and mentioned in MID. Both the directives cover agricultural insurance but MID only refers to livestock insurance and crop insurance, without giving details of crops and animals covered, CLID goes in more details and specifies specific crops and animals covered. Unless these issues are clarified immediately, it might give rise to confusions in the future.
Agricultural insurance
Commercial insurers are facing several challenges with agricultural insurance in Nepal. Moral hazard in agricultural insurance is very high and the cost of verifying a claim is very expensive. It is hard to determine whether the losses are due to factors outside of the farmer’s control or the farmer did not do his best to get a good harvest by using quality inputs like seeds and fertilisers, and appropriate timing of planting. The insurance companies have difficulties evaluating the risk attached to crop production.
There are other technical issues; accurate assessment of input cost for different crops, and crop losses in different regions are not readily available. Some of the terms and conditions imposed by BS do not support the market conditions. Terms and conditions such as the insured perils, capping of the sum assured, capping of the commission payable put a lot of restrictions on the insurers. There is no reinsurance available for agricultural insurance.
Agricultural insurers, therefore, are finding it difficult to scale their business and are reluctant to enter this market in a big way[20].
The compensation on crop insurance is on the basis of input cost, which is not considered to be a “value for money” proposition by the farmers. A large number of farmers, especially the rice farmers, cannot afford the premium. As a result, the demand for crop insurance is quite low.
CLID itself is not sufficient to implement agricultural insurance. BS still needs to develop agricultural insurance rules and regulations. The directive needs to be improved further for the effective implementation and monitoring of agricultural insurance. BS was set up to supervise commercial insurance industry; there is lack of agriculture insurance expertise at BS (actuary, statisticians, underwriters, risk analysts and loss assessors etc.).
Commercial insurers do not have a distribution network in rural areas and therefore are facing difficulties in selling agricultural insurance to rural farmers. Communication to remote areas is expensive and time-consuming.
Agricultural products vary from place to place. Also, the risks attached to the products vary according to climate and topography. The current design of the products in CLID does not recognise these variations. The premium and the compensation packages designed in CLID are uniform throughout the country and need to be revised.
There is no livestock accident and mortality policy or table for livestock in the country. The risks covered under CLID are almost comprehensive coverage, making it very difficult for the insurers to comply with. Some of the risks covered are catastrophic risks, exposing the insurer to the possibility of a huge claim, which, in the absence of reinsurance facility, could financially damage the insurer severely.
Though the farmers are aware of the government scheme for crops and livestock, they find the schemes overwhelmingly complicated and difficult to understand. To solve this issue, the Ministry of Agricultural Development (MOAD) and the BS need to implement training and awareness raising program.
Microinsurance
There are few other gaps in the MID. It does not allow an individual to act as a MIA. This would prevent the insurance companies to employ their existing insurance agents to sell micro insurance. The MID also has not included “cooperatives” in the list of organisations allowed to be appointed as MIA. However, BS allows cooperatives to be appointed as MIA and has confirmed that it will continue to do so in the future.
MID, as it stands now, is not sufficient to implement microinsurance fully. BS still needs to develop microinsurance rules and regulations. The directive needs to be improved further for the effective implementation and monitoring of microinsurance. There is no obligation on commercial insurers to sell any minimum number of policies per year to socially backwards and economically deprived rural community. The MID does not identify who is responsible for supervising the MIA. The number of people to be covered under Health Family Micro Insurance is not identified. The expression “family“ is not defined. Details of sum assured premium, commission, minimum and maximum age are not defined for the product “Whole Life Micro Life Insurance“. These gaps need to be dealt immediately otherwise it will only cause confusion in the market.
BS was set up to supervise commercial insurance industry; there is a lack of microinsurance expertise at BS (actuary, statisticians, underwriters, risk analysts and loss assessors etc.). This should be addressed through an extensive capacity building at BS.
Solutions
- BS should immediately add an additional paragraph in MID stating that the crop insurance and livestock insurance referred to in MID should be read with CLID and both will regulate agricultural insurance in Nepal. A minimum number of policies to be sold by insurers should be stated in both the directives.
- Insurers need to think in terms of alternative distribution channels such as development banks, suppliers of fertilisers or seeds or pesticides or insecticides, utility companies, chain stores, retail outlets such as town/village corner stores, foreign remittance payment networks, cell phone airtime providers and SIM card vendors. The farmers in Nepal are already using the services provided by these organisations and trust them. Approaching potential insurance clients through such alternative distribution channels would increase insurance penetration.
- Moral hazard and cost of verifying claims should be controlled by using distribution partners who are already operating in rural areas and are being used by the low-income households.
- Agriculture insurance and microinsurance are social businesses rather than commercial business; the responsibility goes to GoN and BS to improve and introduce innovative distribution services to the household whose livelihood depends on agriculture.
- Insurers need to have access to data like input cost for different crops, and crop losses held at the district level with District Agricultural Development Office. The Ministry of Agricultural Development (MOAD) and BS should facilitate their access.
- There should be regular consultation between BS and the insurers and MID should be reviewed periodically to remove or relax conditions in CLID and MID which cannot be complied with easily by the insurers.
- GoN should negotiate with foreign reinsurers to provide reinsurance coverage for livestock and crop insurance. Alternatively, GoN should consider setting up its own reinsurance company to provide reinsurance facility to insurers working in the agricultural insurance and microinsurance. Such reinsurance company could be owned jointly by GoN and private insurance companies.
- GoN and BS should undertake an extensive awareness raising and insurance literacy program on agricultural insurance and microinsurance in rural areas.
- BS requires extensive capacity building in agricultural insurance and microinsurance so that expertise lacking in actuarial functions, underwriting, risk analysts, loss assessing, statistics and mortality tables construction can be covered.
- MID should be revised from time to time so that gaps in rules and regulations such qualifications and appointment of agents are removed, rules on supervision of MIA developed. Definition of “family” and the minimum number of household members to be covered under “health family micro insurance” to be stated and the maximum age under “whole life microinsurance to be stated.
BIBLIOGRAPHY
UN Human Development Report 2013
IFAD Report 2013
National Living Standards Survey; 2011
Nepal Economic Update by the World Bank Group; April 2014
Pawan Paude; March 2014; History of Insurance Companies in Nepal
PlaNet Finance, 2013; Insights into Microinsurance in Nepal, Kathmandu, Nepal
Ministry of Agricultural Development (MOAD) Website, Kathmandu, Nepal (2014)
PlaNet Finance, 2013; Insights into Microinsurance in Nepal, Kathmandu, Nepal
Strategies and Tools against Social Exclusion and Poverty (STEP), An Inventory of Micro-Insurance Schemes in Nepal, International Labour Organization (ILO), Kathmandu, Nepal
Jas Bahadur; Insurance and its Business in Nepal
[1] As of 31.12.2013; Nepal Economic Update by the World Bank Group; April 2014
[2] UN Human Development Report 2013
[3] IFAD Report 2013
[4] National Living Standards Survey; 2011
[5] Ibid
[6] Ibid
[7] IFAD Report 2013
[8] Ministry of Agricultural Development (MOAD) Website, Kathmandu, Nepal (2014)
[9] National average landholding 0.868; Gross Domestic Product (2013
[10] Nepal Economic Update by the World Bank Group; April 2014
[11] Pawan Paude; March 2014; History of Insurance Companies in Nepal
[12] PlaNet Finance, 2013; Insights into Microinsurance in Nepal, Kathmandu, Nepal
[13] Strategies and Tools against Social Exclusion and Poverty (STEP), An Inventory of Micro-insurance Schemes in Nepal, International Labour Organization (ILO), Kathmandu, Nepal
[14] Livestock (cow, buffalo, yak, pig, goat, bird and fish) and Crop (cereal, vegetables and fruits)
[15] Cow NRs 100,000, Buffalo NRs 150,000, Small Animals NRs 8,000 to 10,000, Bird NRs 400 to 1,200;
[16] Same amount paid by the government; now reduced to 2.5% and same amount paid by the government
[17] Per family; maximum 5 members
[18] Jas Bahadur; Insurance and its Business in Nepal
[19] Maximum input cost
[20] Only 2 out of 16 non-life insurers are currently offering crop insurance
ABBREVIATIONS
BS – Beema Samiti
CG – Community Group
CLID – Crop and Livestock Insurance Directive
Co-ops – Cooperatives
DICGC – Deposit Insurance and Credit Guarantee Corporation
DMID – Draft Microinsurance Directive 2071
FINGOs – Financial Intermediary Non-government Organisations
GDP – Gross Domestic Product
GoN – Government of Nepal
IASC – Nepal Inter-Agency Standing Committee
KM2 – Square Kilometer
MFIs – Microfinance Institutions
MIA – Microinsurance Agent
MID – Microinsurance Directive 2071
MOAD – Ministry of Agricultural Development, Nepal
MoF – Ministry of Finance
NGOs – Non-governmental Organisation
NPR – Nepalese Rupees
RBS – Rastriya Beema Sansthan
SACCOs – Savings and Credit Cooperatives
SIM – Subscribers Identification Module
SPF – Social Protection Fund
UN – United Nations