Kathmandu, 2 Sep: The massive damage to hydropower projects has caused the economic impact of the Bhote Koshi flood to become increasingly evident in the insurance sector as well.
Following the flood, the initial claims lodged with non-life insurance companies have exceeded Rs 25.87 billion, of which approximately Rs 20.50 billion fall solely under engineering and contractor risk insurance. With dozens of hydropower projects affected, the claim amount is expected to rise further as a complete assessment of the damage is carried out.
Insurance expert Dr. Ravindra Ghimire stated that since the full details of the damage to hydropower projects are yet to come in, the substantial financial liability seen in the insurance sector is only an initial picture.
According to the Nepal Insurance Authority, a total of Rs 25.87 billion 35 million worth of claims have been lodged across 15 different non-life insurance companies through 583 insurance policies. The Independent Power Producers’ Association of Nepal (IPPAN) has reported that due to the major disaster, structures of 12 power projects—eight operational and four under construction—have been destroyed. With other projects also affected, approximately 431 megawatts of electricity generation capacity has been disconnected from the Nepal Electricity Authority’s central transmission grid. Billions of rupees in investment, years of effort, and structures of hydropower and transmission systems built with modern technology were swept away by the flood in mere moments.
In terms of amount, the largest claim was lodged with Oriental Insurance Company. According to the Authority’s data, claims worth Rs 13.04 billion 21 million have been filed with that company through eight insurance policies.
Similarly, United Ajod Insurance saw 38 claims amounting to Rs 4.97 billion 48 million; Sanima GIC Insurance received 102 claims totaling Rs 2.10 billion 28 million; Siddhartha Premier Insurance had 67 claims worth Rs 1.88 billion 73 million; and Shikhar Insurance received 127 claims amounting to Rs 1.87 billion 54 million.
Himalayan Everest Insurance received 45 claims worth Rs 64.78 million; Neco Insurance had 66 claims worth Rs 51.70 million; and Sagarmatha Lumbini Insurance received 32 claims totaling Rs 24.23 million.
Likewise, Nepal Insurance had 32 claims worth Rs 23.86 million; IGI Prudential received 26 claims totaling Rs 18.73 million; and NLG Insurance had 21 claims amounting to Rs 11.31 million, according to the Authority’s data. Prabhu Insurance received 14 claims worth Rs 3.12 million; Rastriya Beema Company had two claims amounting to Rs 760,000; National Insurance received two claims totaling approximately Rs 530,000; and Nepal Micro Insurance had one claim of Rs 500,000.
Claims Concentrated in Engineering
Based on the type of insurance policy, the largest amount is concentrated in engineering and contractor risk insurance. Under this category, the initial data shows claims worth Rs 20.50 billion 77 million.
Under property insurance, 113 policies have generated claims totaling Rs 2.34 billion 62 million, while motor insurance saw 313 policies resulting in claims of Rs 1.55 billion 9 million.
Similarly, transport insurance had 47 policies with claims worth Rs 89.77 million; other insurance categories had 54 policies totaling Rs 52.92 million; and health insurance had four policies with claims amounting to Rs 4.16 million.
Insurance expert Ghimire noted that since the flood caused extensive damage to hydropower projects, roads and other infrastructure, vehicles, commercial properties, and goods at border customs points, the claim amount could rise further in the coming days.
Claims Could Reach Billions
Since the claims so far are preliminary, both the number and amount of claims are expected to increase as actual damage details are compiled. Insurance expert Dr. Ravindra Ghimire estimates that the total insurance claims from the Bhote Koshi flood could approach Rs 100 billion.
A full accounting of damage to hydropower projects, private homes, hotels and resorts, warehouses, vehicles, and commercial properties is still being collected. Shambhu Raj Lamichhane, Director of the Nepal Insurance Authority, stated that damage to roads and access infrastructure in the affected areas has made it difficult for insurance companies’ technical teams to conduct on-site inspections.
He added that although the process of documenting claims and preparing payment records has begun, it will still take time for complete details to emerge. He also mentioned that the Authority has directed companies to collect preliminary data on policyholders’ damaged assets and facilitate the claims process.
Companies Ready for Payouts
Insurance sector officials, however, have stated that despite the large volume of claims, Nepali non-life insurance companies are capable of settling them. Various insurance companies have deployed dedicated teams to the affected areas for data collection and claims management. Yugaesh Bhakta Bade Shrestha, Treasurer of the Insurers’ Association and CEO of IGI Prudential Insurance, said that due to difficulties in reaching the field, the full assessment of damage will take time.
The Association has also demanded that the claims process be made easier for policyholders whose necessary documents and evidence may have been destroyed by the flood. The Association has called on the Insurance Authority to establish special criteria that allow claims to be processed based on minimal documents and available evidence.
