![\"am-best-logo\"](\"https:\/\/beijingcareer.com\/wp-content\/uploads\/2025\/04\/am-best-logo.png\"){kind=logo}
The agency notes that even moderate claims can weigh heavily on the small-sized industry, which has limited capacity to absorb large shocks.<\/p>\nCredit rating agency AM Best has warned that Nepal\u2019s non-life insurance market could face serious financial stress following recent riots in Kathmandu.<\/p>\n
The agency notes that even moderate claims can weigh heavily on the small-sized industry, which has limited capacity to absorb large shocks.<\/p>\n
The protests, widely labeled the \u201cGen Z\u201d movement, highlighted how exposed insurers and reinsurers in Nepal are to political and social unrest.<\/p>\n
In a special report titled \u201cRiots Impose Financial Strain on Nepal\u2019s Insurers and Reinsurers,\u201d AM Best observed that although many damaged properties were not insured, policy extensions in Nepal typically provide coverage for riots, strikes, malicious damage, sabotage, and terrorism (RSMDST).<\/p>\n
According to AM Best, insured losses reported so far by the Nepal Insurance Authority have already reached a scale similar to that of the 2015 earthquake.<\/p>\n
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<\/a><\/div>\n<\/div>\nThe agency cites preliminary estimates from industry sources indicating that hotel operators alone have suffered losses exceeding NPR 25 billion (USD 177 million), with retail chains and auto dealers also reporting substantial damage.<\/p>\n
AM Best emphasised that Nepal\u2019s non-life sector, worth around NPR 45 billion, is especially vulnerable due to its modest size. While a pool has been established to share RSMDST risks, insurers are still expected to retain more exposure than anticipated. For companies with thin capital buffers, the rating agency warned this could erode solvency levels and weaken their ability to withstand further shocks.<\/p>\n
In its report, AM Best also flagged concerns for Nepal\u2019s reinsurers. Although retrocession arrangements\u2014passing risks on to other reinsurers\u2014may provide some relief, the agency said high levels of retained exposure are likely to place domestic reinsurers under significant strain. This could reduce their ability to support the wider market in the near term.<\/p>\n
AM Best further cautioned that political uncertainty adds another layer of difficulty. Changes in government can delay regulatory approvals and hinder insurers\u2019 efforts to raise capital or secure liquidity.<\/p>\n
According to the agency, such delays risk amplifying financial stress if claims escalate faster than insurers and reinsurers can rebuild their balance sheets.<\/p>\n
AM Best\u2019s analysis underscores how a single episode of civil unrest can have an outsized effect on Nepal\u2019s insurance sector. With insured losses already nearing levels last seen during one of the country\u2019s worst natural disasters, the agency says insurers and reinsurers now face not only financial strain but also the risks posed by a fragile political environment.<\/p>\n
\u201cThe outsized proportion of losses arising from widespread riots highlights the likelihood of earnings and capital impacts on the market, especially if claims continue to escalate,\u201d added Susan Tan, Senior Financial Analyst, AM Best.<\/p>\n
The post AM Best warns of heavy strain on Nepal\u2019s insurance industry after Kathmandu riots<\/a> appeared first on ReinsuranceNe.ws<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":" Credit rating agency AM Best has warned that Nepal\u2019s non-life insurance market could face serious financial stress following recent riots in Kathmandu. The agency notes that even moderate claims can weigh heavily on the small-sized industry, which has limited capacity to absorb large shocks. The protests, widely labeled the \u201cGen Z\u201d movement, highlighted how exposed […]<\/p>\n","protected":false},"author":1,"featured_media":930,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[12],"tags":[],"_links":{"self":[{"href":"https:\/\/beijingcareer.com\/index.php\/wp-json\/wp\/v2\/posts\/2913"}],"collection":[{"href":"https:\/\/beijingcareer.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/beijingcareer.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/beijingcareer.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/beijingcareer.com\/index.php\/wp-json\/wp\/v2\/comments?post=2913"}],"version-history":[{"count":3,"href":"https:\/\/beijingcareer.com\/index.php\/wp-json\/wp\/v2\/posts\/2913\/revisions"}],"predecessor-version":[{"id":2916,"href":"https:\/\/beijingcareer.com\/index.php\/wp-json\/wp\/v2\/posts\/2913\/revisions\/2916"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/beijingcareer.com\/index.php\/wp-json\/wp\/v2\/media\/930"}],"wp:attachment":[{"href":"https:\/\/beijingcareer.com\/index.php\/wp-json\/wp\/v2\/media?parent=2913"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/beijingcareer.com\/index.php\/wp-json\/wp\/v2\/categories?post=2913"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/beijingcareer.com\/index.php\/wp-json\/wp\/v2\/tags?post=2913"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}