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LIFE INSURANCE |
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LIFE INSURANCE |
New Kid On The Block With the entry of a new player in the life insurance sector, the market may grow further By A CORRESPONDENT Vishal Group Limited (VGL), one of the leading business and industrial houses of Nepal, joined hands with the Life Insurance Corporation (LIC) of India to start life insurance services in Nepal. G. N. Bajpai, chairman of LIC, and Ashok Agrawal, chairman of the VGL, signed a memorandum of understanding last week to start their operations by March 2001. The two companies will promote a Rs. 250 million joint venture company -- Life Insurance Corporation ( Nepal ) -- with 55 percent shares owned by LIC. The VGL will have a 25 percent stake in the company and the remaining 20 percent shares will be sold to the general public. This is the first time a foreign company will be entering the life insurance business in Nepal after the government decided to open the sector to foreign investment. American Life Insurance Company (ALICO) had also tried to enter this lucrative sector but is facing a court battle. The manufacturing activities of Vishal Group range from iron and steel products, dry cells, tooth pastes and garments. The group is a leading trader in metals, alcoholic beverages, cosmetics, travel goods, flooring and furnishing, and textiles. One of the promoters of NIC Bank, the group operates two finance companies under its banner. A giant in the insurance sector in India, the value of total assets of the LIC as at the end of the March 2000 stood at nearly NRs 257.5 billion. With a network of 2,048 branches covered by more than 650,000 agents, the corporation has issued over 100 million policies. "This joint venture will mark the beginning of a new era in the life insurance sector in Nepal and will have its impact on the overall economy of the country," said Agrawal of the Vishal Group. Added Bajpai of LIC India, "We hope to sell 10,000 policies in the very first year of operations." The new joint venture company will be the third one to start its services in the life insurance sector. Rastriya Beema Sansthan and National Life and General Insurance Company had monopoly in the yet-to-be-tapped life insurance market in Nepal. LIC used to operate in Nepal before the RBS was set up in the early seventies. Studies say less than 1 percent of the adult population have bought insurance policies in Nepal. |
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