Nepal Life Insurance Company (NEPSE: NLIC) — Company Profile

Business Description

Full legal name: Nepal Life Insurance Company Limited NEPSE ticker: NLIC Sector: Life Insurance Registered office: Birgunj, Parsa, Nepal Corporate office: Classic Complex, Kamaladi, Kathmandu Incorporated: 2055/10/18 B.S. (01/02/1999 A.D.) under Nepal's Company Act Insurance license granted: 2058/01/04 B.S. (17/04/2001 A.D.) under the Insurance Act, 2049 NEPSE listing date: 2059/10/08 B.S. (22/01/2003 A.D.)

Nepal Life Insurance Company Limited (NLIC) is a public limited company whose principal activities are the provision of life insurance — both participating (with-profit) and non-participating — distributed through province offices, branches, sub-branches, and an agent network across Nepal. (Source: Q2 FY 2082/83 Quarterly Report, Note 1 — Reporting Entity; Q1 FY 2082/83 Quarterly Report, Note 1 — Primary.)

Product mix. NLIC's portfolio covers at least 24 distinct insurance schemes. Revenue by gross earned premium (GEP) in Q3 FY 2082/83 YTD breaks down as follows. (Source: Q3 FY 2082/83 Segment Report — Primary.)

Endowment-type products — endowment, anticipated endowment, and endowment cum whole life — collectively represent 98.8% of gross premiums. Pure term and foreign employment coverage are negligible by premium volume. This mirrors the sector-wide pattern: endowment products accounted for 87.4% of sector GWP in Q3 FY 2082/83 (Source: NIA Province×Company data — Primary), reflecting Nepali customer preference for savings-linked protection over pure risk coverage.

Subsidiaries and associates. NLIC operates two wholly-owned subsidiaries: (1) Nepal Life Capital Limited, an asset management company in which NLIC holds 2,295,000 shares at NPR 100 face value; and (2) Nepal Life Investment Company Limited, newly established in FY 2081/82, with 18,000,000 shares at NPR 100 face value and NPR 1.8 billion paid-up capital. Associates include Professional Holdings Limited (1,843,224 shares at NPR 400 face value) and Uniglobe Higher Secondary School KTM Ltd. (1,500,000 shares at NPR 400 face value). (Source: Q3 FY 2082/83 Related Party Disclosure notes — Primary.)

Ownership. Promoters hold 51%; public shareholders 49%. Total shareholders: 1,88,400 as at FY 2081/82 year-end. (Source: 26th Annual Report FY 2081/82, Corporate Information page — Primary.)

Market position. As of Q3 FY 2082/83, NLIC holds 25.8% of total life and micro GWP — the largest share of any private life insurer in Nepal, with more than twice the premium volume of the second-ranked private competitor. (Source: NIA Q3 FY 2082/83 Province×Company Premium, Claims & Policies Data (nia.gov.np/stats); Nepal Life Insurance Industry Report 2026, Section 5.1 — Primary.)

Five-Year Financial Summary

All amounts NPR Million unless stated. Figures are Insurance Company standalone from audited annual reports. "M" = million; "Cr" = Crore (NPR 10 million).

Source: FY 2077/78: 23rd Annual Report comparative column (Primary). FY 2078/79: 23rd Annual Report current year column (Primary). FY 2079/80: 24th Annual Report current year column (Primary). FY 2080/81: 25th Annual Report (Primary). FY 2081/82: 26th Annual Report (Primary).

Notes:

‡ FY 2078/79 — extraordinary tax year. Pre-tax profit was NPR 2,441M, but income tax expense consumed NPR 2,344M (an effective rate of 96%), leaving net profit of NPR 97M and EPS of NPR 1.18. The extraordinary charge includes recognition of a large deferred tax liability. This is why FY 2078/79 paid zero cash dividend despite NPR 244 Crore in pre-tax profit. The company resumed dividends from FY 2079/80. (Source: 23rd Annual Report FY 2078/79, Consolidated Statement of Profit or Loss — Primary.)

FY 2077/78 paid-up capital. Year-end paid-up capital was NPR 7,200M (72.0M shares). The 22nd Annual Report corporate information page displayed NPR 8,200M because it was published after the AGM which declared and allotted a 14% bonus (NPR 1,008M) from FY 2077/78 retained earnings; these shares were formally issued in FY 2078/79. (Source: 23rd Annual Report, Share Capital Note 17(a) — Primary.)

FY 2077/78 net profit. Actual net profit was NPR 1,967M (EPS NPR 27). (Source: 23rd Annual Report, prior-year P&L column — Primary.)

Life Insurance Fund. Presented as "Gross Insurance Contract Liabilities" from the NFRS balance sheet, which includes IBNR provisions. The FY 2077/78 standalone Annual Report states NPR 108,922M under the narrower "Life Insurance Fund" definition. The NFRS comparative figure from the 23rd Annual Report shows NPR 112,552M for the same year-end. The NFRS figure is used throughout for comparability.

FY 2079/80 total assets. The 24th Annual Report (Primary) shows NPR 180,476M; the 25th Annual Report's comparative column shows NPR 183,484M — a minor reclassification restatement of NPR 3,008M. The 24th Annual Report figure is used in this table.

Net worth per share FY 2081/82. Derived: equity NPR 13,004M divided by 90,211,209 shares equals NPR 144.16 per share, consistent with the company's own corporate information disclosure of NPR 144. (Derived — arithmetic verified from primary source.)

Solvency ratio methodology change. The apparent decline from 322% (FY 2079/80) to 144.9% (FY 2080/81) is entirely attributable to the NIA's adoption of the Risk-Based Capital (RBC) Framework effective FY 2080/81. Prior years used a simpler paid-up capital multiple methodology. The two ratios are not comparable across the methodology break. (Source: 25th Annual Report FY 2080/81, Accounting Ratios solvency chart note: "Full Adoption of Risk Based Capital in FY 2080/81" — Primary.)

n/d = Not disclosed in the source documents accessed.

Quarterly Performance — FY 2082/83

All figures are Insurance Company standalone (not Group consolidated), in NPR Million. (D) = arithmetic derivation: standalone quarter equals current YTD minus prior-period YTD. YTD columns are read directly from the respective quarterly P&L and Distributable Profit Statement.

(Sources: Q1 FY 2082/83 Quarterly Report, period ended Ashoj 31, 2082 / 17 October 2025; Q2 FY 2082/83 Quarterly Report, period ended Poush 30, 2082 / 14 January 2026; Q3 FY 2082/83 Quarterly Report, period ended Chaitra 30, 2082 / 13 April 2026 — all Primary, company-filed.)

¹ Q3 9M investment income derived by summing segment-wise "Income from Investments & Loans" across all product segments in the Q3 Segment Report (Insurance Company). Q2 and Q3 standalone are quarter-on-quarter derivations. (Source: Q3 FY 2082/83 Segment Report — Primary, Derived.)

² Annualized EPS as reported in the "Other Indicators" section of each quarterly report (Insurance Company column). Q2 and Q3 standalone EPS figures are not meaningful on an annualized basis given the actuarial profit-timing structure described below. (Source: Q1 and Q3 FY 2082/83 Other Indicators — Primary.)

Premium trajectory. GEP decelerated across the year: Q1 NPR 13,504M, Q2 NPR 12,166M, Q3 NPR 11,435M. On a nine-month basis, gross premiums of NPR 37,105M track toward approximately NPR 48–50 billion full-year (FY 2081/82 full-year GEP was NPR 48,202M), implying Q4 must recover to NPR 11,000–13,000M to sustain prior-year growth levels.

Actuarial profit timing. FY 2082/83 nine-month net profit of NPR 454.89M represents 19.8% of the FY 2081/82 full-year profit of NPR 2,294M. (Derived: 454.89 / 2,294.36 = 19.8%.) This is structurally expected in life insurance. Under the NIA's Actuarial Valuation Directive, profits from participating business are formally recognised only after the annual actuarial review, typically completed in Q4. Q1–Q3 profits are therefore structurally understated relative to the full year. This pattern held in FY 2081/82, when the Q3 nine-month profit represented approximately 27.3% of that year's final result. The Q4 actuarial sweep will determine FY 2082/83's final outcome.

Year-on-year comparison. Q3 9M net profit of NPR 454.9M compares with the prior-year Q3 9M restated figure of NPR 626.6M — a year-on-year decline of 27.4%. The Q3 report discloses a prior-period correction to comparison figures: agency expenses were understated (increased by NPR 138.7M) and income tax was also adjusted (increased by NPR 238.2M), reducing prior-year Q3 9M net profit by NPR 25.6M from NPR 652.2M to NPR 626.6M. (Source: Q3 FY 2082/83 Quarterly Report, Note 2(j) — Change in Accounting Policies — Primary.)

Contract liability growth slowing. Gross Change in Contract Liabilities moved from Q1 NPR 11,719M to Q2 NPR 11,011M to Q3 NPR 9,726M. The 9M total of NPR 32,456M is below a straight-line extrapolation of the Q1 run-rate. Slower reserve accumulation may reflect moderating premium volumes and/or rising policy surrenders and maturities.

Operating cash flow. Q3 9M operating cash flow of NPR 20,574M substantially exceeds the accounting profit of NPR 455M. This structural divergence is intrinsic to life insurance: premiums collected in cash exceed claims and expenses paid in cash during the period; the residual flows into the insurance float. The Q1 operating cash flow of NPR 10,238M is the largest single quarter, consistent with the Shrawan-Ashoj new-policy sales cycle.

Balance Sheet and Investment Portfolio

Balance Sheet Trend

All amounts NPR Million. (Sources: 23rd Annual Report FY 2078/79 and 24th Annual Report FY 2079/80 — Primary; 26th Annual Report FY 2081/82, Financial Highlights — Primary; Q3 FY 2082/83 Quarterly Report, balance sheet — Primary.)

Total assets have grown 2.32x in approximately five years — from NPR 127,259M at FY 2077/78 to NPR 293,807M at Q3 FY 2082/83. Growth is driven primarily by the accumulation of the life insurance fund, which grows as policy reserves increase with each renewal premium collected.

Shareholder equity declined from NPR 13,004M at FY 2081/82 year-end to NPR 11,976M at Q3 FY 2082/83 — a fall of NPR 1,028M over nine months. The decline reflects: (a) the FY 2081/82 cash dividend outflow of NPR 1,356M; (b) OCI movements (fair value reserve on equity investments fell NPR 647M per Q2 equity statement); partly offset by Q3 YTD net profit of NPR 455M. (Derived from Q3 FY 2082/83 equity movement statement.) This is a normal cash-return mechanism, not a sign of business deterioration.

Cash redeployment. Cash and cash equivalents fell from approximately NPR 11,606M at the start of FY 2082/83 to NPR 3,658M (Group) at Q3 end. The cash was redeployed through NPR 39,443M in new bond purchases, NPR 4,260M in new deposits, and NPR 1,922M in new borrowings. (Source: Q3 FY 2082/83 Cash Flow Statement — Primary.) This directionally reflects portfolio repositioning into longer-duration assets.

Investment Portfolio

• Total investments at Q3 FY 2082/83: NPR 242,348M (NPR 24,235 Crore). (Source: Q3 FY 2082/83 balance sheet, Insurance Company — Primary.)
• Composition: The quarterly report does not separately disclose the breakdown by asset class. An ICRA Nepal rating review note (cited in Insurance Khabar) states approximately 77% in bank fixed deposits. At Q3 total investments of NPR 24,235 Crore, this would imply approximately NPR 18,660 Crore in bank fixed deposits. (Inference — not independently verified from quarterly filings; ICRA source is secondary/tertiary.)
• Bond purchases, Q3 YTD: NPR 39,443M in new long-duration bond acquisitions. The nature of these bonds — government versus corporate/institutional — is not specified in the filing. (Source: Q3 FY 2082/83 Cash Flow Statement — Primary.)
• Policy loans. Outstanding balance of NPR 34,998,779,337 (NPR 3,500 Crore) at Q3 end. (Source: Q3 FY 2082/83 balance sheet, "Loans" line — Primary.) Policy loans earn interest at approximately 2% above the policy guaranteed rate and carry zero credit risk, fully secured against surrender values.
• Average investment return trend. 10.30% in FY 2079/80, declining to 9.92% in FY 2080/81, reflecting high-yielding fixed deposits rolling off. (Source: 25th Annual Report, Accounting Ratios table — Primary.) An ICRA secondary note indicates the Q3 FY 2082/83 run-rate has fallen to approximately 9.4%. (Tertiary — not independently verified from filings.)

Solvency Position

The NIA adopted the Risk-Based Capital (RBC) solvency framework effective FY 2080/81. The minimum required solvency ratio is 130%.

(Source: 26th Annual Report FY 2081/82, Financial Highlights — Primary; Q3 FY 2082/83 Other Indicators note — Primary.)

The solvency surplus at FY 2081/82 year-end was NPR 9,920M (NPR 992 Crore) above the regulatory minimum. (Derived: 28,396M minus 18,476M.) The slight increase to 154.0% at Q3 FY 2082/83 indicates the capital position has been maintained despite the interim dividend outflow.

Market Position and Competitive Landscape

Market Share

(Source: NIA Province×Company Data, Q3 FY 2082/83 nine months YTD, as cited in Nepal Life Insurance Industry Report 2026, Section 5.1 — Primary.)

* Himalayan Life's 1.4% loss ratio is anomalous, likely reflecting a lag in claims emergence on the recently merged book (Himalayan Life was formed in 2023 from the merger of Prime Life, Gurans Life, and Union Life). Expected to normalize upward.

NLIC's share is 2.15x the nearest private competitor (25.8% versus 12.0% for National Life). No other private insurer has exceeded 15% market share. NLIC's dominance has been consistent across multiple years: 26.10% in FY 2080/81 and 26.44% in FY 2081/82, per the chairman's letters of the 25th and 26th Annual Reports respectively. (Sources: 25th Annual Report FY 2080/81 chairman's letter; 26th Annual Report FY 2081/82 chairman's letter — Primary.)

Competitive Quality Metrics

(Source: NIA Province×Company data Q3 FY 2082/83 — Primary.)

NLIC's loss ratio of 23.2% is lower than National Life (27.7%) and LIC Nepal (33.3%), suggesting better mortality and morbidity experience or a younger-average-age policy book. The renewal ratio of 77.0% is above the apparent private-sector average of approximately 73–74%, indicating stronger policyholder retention — a critical metric for an endowment-driven book where persistency directly determines premium income and fund growth.

Product Concentration

NLIC's Q3 YTD segment data shows that endowment-type products collectively account for 98.8% of premiums — a higher concentration than the sector average of 87.4%. (Source: Q3 FY 2082/83 Segment Report — Primary.) This concentration implies high surrender value obligations embedded in the Life Fund and investment return dependency: if investment yields fall below guaranteed bonus rates, the participating business economics come under pressure. It also means limited diversification benefit from product mix within NLIC's book.

The broader sector context — sector-wide fund and investment data, policy count trends, the renewal premium flywheel, and the NIA regulatory framework — is covered in the Nepal Life Insurance Sector Industry Report.

Regulatory Framework

Primary Legislation

• Insurance Act, 2079 (2022 A.D.): Replaced the Insurance Act, 2049. Established the Nepal Insurance Authority (NIA) as the independent sectoral regulator, replacing Beema Samiti. The NIA is empowered to issue and revoke licenses, set capital requirements, prescribe investment norms, conduct actuarial oversight, and levy sanctions. (Source: NIA Annual Report FY 2081/82, Section 1 — Primary.)
• Insurance Regulation, 2079: Subsidiary regulation under the Insurance Act, prescribing product filing requirements, commission caps, and complaint resolution. (Source: NIA publications.)
• NIA Financial Directive, 2080: Prescribes reserve allocations — 10% of PAT to Catastrophe Reserve, 1% to CSR Reserve, and minimum solvency margin requirements. (Source: Q2 FY 2082/83 Notes on Reserves — Primary.)

Risk-Based Capital Framework

The NIA adopted Risk-Based Capital as the solvency framework effective FY 2080/81. The minimum required ratio is 130% (Available Capital divided by Required Capital). (Source: Q3 FY 2082/83 Other Indicators: "Solvency Margin Ratio: 1.54. Minimum requirement as per directive: 1.30" — Primary.)

NLIC's solvency at 153.7% (FY 2081/82) and 154.0% (Q3 FY 2082/83) provides approximately 24 percentage points of buffer above the regulatory minimum.

Investment Mandate — The 35% Government Securities Transition

The critical regulatory change: cap to floor. The NIA Investment Directive for Insurers, 2025 (effective FY 2082/83) reversed the government securities requirement from a maximum cap of 35% to a mandatory minimum floor of 35% of total investable funds. Prior directives treated 35% as a ceiling; the 2025 directive makes it a floor. (Source: New Business Age, "Nepal Insurance Authority Eases Rules for Investment in Government Bonds" — Secondary, citing NIA directive.)

Sector-wide compliance gap. As of Q3 FY 2082/83, the life insurance sector holds government securities representing only 8.0% of total life investment of NPR 8,752,453 Lakh — a 27-percentage-point shortfall against the 35% minimum. Closing this gap would require the sector to move approximately NPR 237 billion from bank fixed deposits into government securities. (Source: NIA Q3 FY 2082/83 Life Insurer Investment Portfolio Data (nia.gov.np/stats) — Primary; Nepal Life Insurance Industry Report 2026, Section 8 — Primary.)

NLIC's position. NLIC's specific government securities allocation is not separately disclosed in the Q3 FY 2082/83 quarterly reports. The balance sheet shows total investments of NPR 242,348M without breaking out the government bond component. (Source: Q3 FY 2082/83 balance sheet, Insurance Company — Primary.) A directional signal is visible: Q3 YTD cash flow shows NPR 39,443M in new bond purchases during the nine-month period. Whether these are government bonds or corporate/institutional bonds is not specified in the filing. (Source: Q3 FY 2082/83 Cash Flow Statement — Primary.) A secondary ICRA Nepal rating note indicates approximately 77% of NLIC's portfolio is in fixed deposits, implying the government securities allocation may remain significantly below the 35% floor. (Inference — not independently verified from quarterly filings.)

Earnings implication. Investment income contributed NPR 20,754M of NPR 68,449M total income in FY 2081/82 — 30.3% of total income. (Source: 26th Annual Report FY 2081/82 — Primary.) If NLIC must shift approximately 35% of its NPR 242,348M portfolio (approximately NPR 84,822M) into government securities from a current low base, this implies replacing a portion of higher-yielding bank fixed deposits with GoN bond yields. If prevailing GoN yields are below FD rates, this directionally compresses investment income, the primary driver of profitability. The compliance timeline and whether the NIA has issued company-specific transition schedules is not disclosed in available filings.

Other investment class limits from the same directive: Class B bank FDs maximum 15%; Class C bank/financial institution FDs maximum 7%; bank/financial institution equity maximum 30%; listed company bonds/debentures maximum 20%; real estate maximum 10%. (Source: Q2 FY 2082/83 Notes on Insurance Contract Liabilities; NIA Investment Directive 2025.)

NFRS 17 (Future Accounting Change)

The Nepal Accounting Standards Board has issued NFRS 17 (Insurance Contracts) — Nepal's local adoption of IFRS 17. As of Q3 FY 2082/83, NFRS 17 is not yet effective. When adopted, it will fundamentally change how insurance contract liabilities are measured, replacing the current deterministic reserving approach with contractual service margin, risk adjustment, and best-estimate liability components. This will require material systems and actuarial model investment across the sector. (Source: Q2 and Q3 FY 2082/83 Notes, Note 2(h) — Recent Accounting Pronouncements — Primary.)

Actuarial Valuation

The Life Insurance Fund is determined by an annual actuarial valuation conducted by an external appointed actuary approved by the NIA. NLIC changed its appointed actuary from Milliman Advisors LLP (FY 2080/81) to BDO Actuarial Services LLP (FY 2081/82). The actuarial review is submitted to the NIA for approval and drives Q4 profit recognition — the most consequential single event in the NLIC financial calendar. (Source: 26th Annual Report FY 2081/82, corporate information page — Primary.)

Reinsurance

NLIC reinsures excess mortality risk with Hanover Re Malaysia and Nepal Re-Insurance Co. Ltd. Reinsurance ceded as a percentage of GWP was 1.05% in FY 2081/82, compared with 1.66% in FY 2080/81 — the company retained more risk in FY 2081/82, with a retention ratio of 98.95%. (Source: 26th Annual Report FY 2081/82, Accounting Ratios table; Q3 FY 2082/83 Notes on reinsurance — Primary.)

Governance and Related-Party Transactions

Board Composition

(Source: 26th Annual Report FY 2081/82, Director profiles; Q2 and Q3 FY 2082/83 Related Party Disclosure notes — Primary.)

The board has six members — three promoter representatives and three public shareholder representatives. A previous promoter director (Mr. Vivek Agrawal) resigned on 2081/08/20, as noted in the 26th Annual Report chairman's report. (Source: 26th Annual Report FY 2081/82 — Primary.)

Senior management. CEO Mr. Pravin Raman Parajuli has held this role across all five annual reports reviewed. Deputy CEO: Mr. Amit Kumar Keyal. CFO: Mr. Prem Prasad Regmi. Company Secretary: Mr. Binod Kumar Bhujel. (Source: 26th Annual Report FY 2081/82, management team listing — Primary.)

External auditor. P.L. Shrestha & Co. has been retained as external auditor continuously across FY 2080/81 and FY 2081/82. Annual audit fee: NPR 12,00,000 for a company with over NPR 25,000 Crore in total assets. (Source: 26th Annual Report FY 2081/82, shareholder meeting notice section — Primary.)

Related-Party Transactions

(Source: Q1, Q2, and Q3 FY 2082/83 Related Party Disclosures — Primary.)

The quarterly RPT tables for Holding Company, Subsidiaries, Associates, and Fellow Subsidiaries show nil or zero values for premium, commission, lending, and purchase/sale transactions. No material related-party transactions involving insurance premiums, loans, or significant financial flows between NLIC and promoter-affiliated entities are disclosed in the quarterly reports reviewed. The annual report RPT notes — which would typically be more comprehensive — were not fully accessible from the portions of the 26th Annual Report reviewed.

Governance Observations

• Promoter concentration. The founding promoter group holds 51% of shares and controls three of six board seats. Chairman Sanghai has been in position since at least FY 2077/78. Long-tenure promoter boards are common in Nepal's private companies but create agency risk for minority shareholders over time.
• CEO tenure. CEO Parajuli has served across all five annual reports reviewed — operational continuity, but also concentrated management authority with no disclosed succession planning.
• Actuary change. The switch from Milliman Advisors LLP (a globally recognized actuarial firm) to BDO Actuarial Services LLP for FY 2081/82, without explanation in the annual report, warrants investor attention. Different actuarial firms can apply materially different assumptions on mortality, lapse, and discount rates, directly affecting the size of the Life Fund and the amount of surplus available to shareholders.
• Quarterly disclosure. The Q3 FY 2082/83 report does not include management commentary explaining the 23.8% year-on-year decline in nine-month net profit or the NPR 1,922.85 Crore in new borrowings during the period.

Capital Allocation History

Dividend Record

(Source: 26th Annual Report FY 2081/82, dividend chart, page 25; respective annual reports — Primary. FY 2081/82 cash dividend amount confirmed from chairman's report: "NPR 1,44,93,48,094" — Primary.)

† FY 2077/78 cash amount estimated at 15.69% of NPR 720 Crore paid-up capital = approximately NPR 113 Crore. The 22nd Annual Report was not directly accessed for this figure. (Estimate.)

‡ FY 2078/79 zero dividend caused entirely by the extraordinary income tax charge (NPR 2,344M against pre-tax profit of NPR 2,441M). Net profit collapsed to NPR 97M, leaving no distributable surplus. (Source: 23rd Annual Report P&L — Primary.)

The dividend pattern indicates a consistent objective of approximately 21% total shareholder return on paid-up capital (cash plus bonus combined) in years with normal earnings. The FY 2080/81 shift to a higher bonus-share component (10% bonus versus 11.05% cash) was driven by RBC capital requirements — retaining more equity while maintaining the headline return percentage. (Source: 26th Annual Report FY 2081/82, dividend chart and chairman's commentary — Primary.)

Share Capital Evolution

(Sources: 23rd Annual Report Share Capital Note 17(a); 26th Annual Report corporate information; Q3 FY 2082/83 balance sheet; Merolagani.com accessed June 27, 2026 — Secondary.)

Merolagani shows 94,802,015 shares outstanding as of June 27, 2026, consistent with a fully processed 5% bonus on the FY 2081/82 base of 90,211,209 shares (90,211,209 × 1.05 = approximately 94,721,769). (Secondary source: Merolagani.com.)

Capital Expenditure

NLIC is an asset-light business. Capex for the nine months to Q3 FY 2082/83 is estimated at NPR 50–80M — less than 0.02% of total assets. (Estimate based on Q1 PPE acquisition of NPR 12.3M and Q2 YTD of NPR 36.4M.) For reference, FY 2081/82 depreciation and amortization was NPR 124.10M (NPR 12.41 Crore), a proxy for the steady-state capex requirement. (Source: 26th Annual Report FY 2081/82, Value Added Statement — Primary.)

Borrowings

Q3 FY 2082/83 cash flow shows proceeds from borrowings of NPR 19,228.48M (NPR 1,922.85 Crore) against repayments of NPR 7,480.96M (NPR 748.10 Crore) — net new borrowings of approximately NPR 1,174.38 Crore during the nine months. The nature of these borrowings is not identified in the quarterly report. This coincides with NPR 39,443M in bond purchases during the same period. (Source: Q3 FY 2082/83 Cash Flow Statement — Primary.)

What Is Not Disclosed

The following material questions cannot be answered from the source documents available for this profile:

1. FY 2078/79 extraordinary tax breakdown. The precise split of the NPR 2,344M income tax charge — between current tax, deferred tax liability recognition, and any prior-period adjustments — is not confirmed from the portions of the 23rd Annual Report accessed.

2. Nature and counterparty of Q3 FY 2082/83 borrowings. NPR 1,922.85 Crore in new borrowings is not identified by counterparty or instrument type in the quarterly cash flow statement.

3. Investment portfolio breakdown by asset class. Annual and quarterly reports do not disclose the split between government bonds, bank fixed deposits, equities, mutual funds, real estate, and policy loans within the total investment portfolio. The claim of approximately 77% in fixed deposits (ICRA secondary source) cannot be verified from filings.

4. Agency channel economics. The commission ratio has declined from 11.72% (FY 2076/77) to 7.61% (FY 2081/82). Whether this reflects a structural shift in channel mix or deliberate commission rate reduction is not explained in management commentary.

5. Actuary change rationale. No explanation is given for the switch from Milliman Advisors LLP to BDO Actuarial Services LLP between FY 2080/81 and FY 2081/82.

6. Q3 YTD profit decline drivers. Q3 YTD net profit fell 23.8% year-on-year. Management expense ratio has risen from 3.94% to 4.27% (Q3 YTD Other Indicators). The precise drivers — whether higher claims, lower investment yield, higher expenses, or actuarial timing — are not quantified in the quarterly disclosures.

7. RPT completeness at annual level. The quarterly RPT tables show nil for most line items. The annual report RPT notes may contain more granular related-party disclosures. This gap cannot be filled from available sources.

8. Promoter cross-holdings. The profiles of Chairman Sanghai (Triveni Group) and Director Golyan (Golyan Group) indicate diversified conglomerate backgrounds, but the quantum of group entity contracts with NLIC — if any — is not visible in available data.

9. NFRS 17 adoption timeline. Notes state NFRS 17 is issued but not yet effective. The NIA has not publicly announced an implementation date from sources accessed. The impact on financial reporting could be significant.

10. Subsidiary performance. Nepal Life Capital Limited (asset management) and Nepal Life Investment Company Limited (newly established) — their separate financial performance is not disclosed in quarterly reports beyond consolidation.

Valuation Context

All market data from Merolagani, accessed June 27, 2026. These are reference data points, not investment recommendations.

Note on trailing P/E. The 29.3× trailing P/E on FY 2081/82 full-year audited EPS of NPR 25.49 is the most meaningful reference multiple. Q3 YTD annualized EPS figures materially understate earning power because the bulk of annual profit is recognised in Q4 following the actuarial valuation. Using annualized Q3 figures to value a life insurer produces a misleading result.

Note on NFRS 17. When NFRS 17 is adopted in Nepal, it will alter how insurance liabilities — and therefore reported equity and profit — are measured. Comparisons of valuation multiples across the NFRS 17 transition will require careful adjustment.

What We're Watching

1. FY 2082/83 full-year annual result and actuarial bonus rate. The Q4 actuarial valuation is the single most significant event in NLIC's financial calendar each year. Three sub-questions: (a) full-year net profit — does it hold at or above FY 2081/82's NPR 229.44 Crore, confirming the Q3 YTD decline was timing-driven, or does it validate structural deterioration? (b) actuarial bonus rate declared for FY 2082/83 — if BDO Actuarial, newly appointed, applies more conservative assumptions than Milliman did, a lower bonus rate would signal a systematic reset of the earnings base; (c) whether the chairman's report provides explanation for the Q3 profit decline and the NPR 1,922.85 Crore in new borrowings.

2. Government securities compliance transition. As the NIA's 35% minimum floor takes effect, NLIC's portfolio repositioning will shape investment income for the next several years. Key questions: what transition timeline has the NIA communicated to life insurers; what are current GoN bond yields relative to prevailing bank FD rates; and how much of the NPR 39,443M in Q3 bond purchases represents government securities? These will not be fully visible until the FY 2082/83 annual report and subsequent investment portfolio disclosures.

3. New business generation and the renewal premium pipeline. The declining Q3 premium trajectory — GEP falling from NPR 13,504M in Q1 to NPR 11,435M in Q3 — and the sector-wide decline in new policies issued (NIA data show a 57% drop from the FY 2079/80 peak to FY 2081/82) point to a slowing of new policy acquisition. Because roughly 75.6% of sector GWP is renewal premium (NIA Q3 FY 2082/83 data), business written today seeds the renewal income of 2027–2035. Sustained new business weakness will show in GWP growth only after several years, but it is the right metric to monitor now.

References