Kathmandu-The Gen Z protests of September 8 and 9 have created the largest-ever liability in Nepal’s insurance sector. The Nepal Insurance Authority (NIA) reports claims worth Rs 20.70 billion so far, with total claims expected to exceed Rs 30 billion.

During the 2015 Gorkha earthquake, insurers paid about Rs 18 billion in claims. The COVID-19 pandemic and 2023 floods also strained the sector, but the recent protests are projected to bring even greater pressure. The  NIA says the damages are the biggest since the earthquake.

Protesters vandalized and set fire to Singha Durbar, the Supreme Court, and other government offices. These properties were not insured, so insurers face no direct liabilities there.

The burden falls on private and industrial properties, where the damage is extensive.

Initial assessments show losses at Chandragiri and Maulakali cable cars, Bhatbhateni Supermarket, CG Digital Park, Hilton and Hyatt Regency hotels, Ncell, various bank branches, auto showrooms, and private homes and businesses.

Large liabilities arise because businesses operate mainly on loans, which require compulsory insurance. Property insurance policies also mandate coverage for fire and vandalism. Claims have been filed under property, motor, aviation, agriculture, engineering, and contractor risks. Officials say data remains preliminary, with more claims expected.

Though state assets were not insured, claims will rise further from vehicle insurance and smaller cases of looting and vandalism. As the claims fall under riot and terrorism coverage, Nepal Reinsurance will shoulder a major burden. Insurers retain 35 percent of liabilities, transferring the remaining 65 percent to reinsurers. Nepal Re is expected to pay billions.

The Nepal Insurers’ Association held an emergency meeting, concluding that claims could surpass earthquake levels. In a statement, it said insurers remain capable and committed to honoring claims despite challenges. The Authority has directed insurers to ensure timely and transparent settlements.

ICRA Watchlist
Credit rating agency ICRA Nepal has placed 13 companies on its watchlist due to protest-related damages. Twelve are under 'Watch with Negative Implications' and one under 'Watch with Developing Implications.'

ICRA said the negative list reflects likely downgrades once uncertainties are resolved. Companies under the developing list could see ratings rise, fall, or remain unchanged.

Six non-life insurers—Nepal Reinsurance, Shikhar Insurance, Sagarmatha Lumbini Insurance, Siddhartha Premier Insurance, NLG Insurance, and United Ajod Insurance—are flagged as most affected. ICRA said the protests could significantly undermine the financial stability of non-life insurers and domestic reinsurers.