IMPACT OF CLAIM PAYMENT ON PROFITABILITY OF NEPALESE NON-LIFE INSURANCE COMPANIES

Abstract

The research, which uses eight example firms, examines how claim payment affects the profitability of Nepali non-life insurance companies. Out of the 14 listed non-life insurance companies in the Nepal Stock Exchange, they are Siddhartha Premier Insurance Limited, Shikhar Insurance Company Limited, Sagarmatha Lumbini Insurance Company Ltd, Himalayan Everest Insurance Limited, Neco Insurance Limited, Nepal Insurance Company Ltd., NLG Insurance Company Limited, and Prabhu Insurance Company Limited. Determining the impact of claim payment on the non-life insurance company's profitability is the primary goal of the research. These four businesses were specifically chosen to accomplish the goal and respond to the study questions. There is an equal possibility of selecting a non-life insurance company. The selection of these eight insurance firms is based on the availability of data. This research makes use of secondary data. This analysis incorporates data from 10 fiscal years, ranging from 2013/14 to 2022/23. The research used a secondary data collecting methodology. The impact of claim paid, loss ratio, and expenditure ratio on profitability that is, net profit margin and return on equity is also ascertained in Nepalese Non-Life Insurance Company via the use of a casual comparative study methodology. The claim paid, loss ratio, expenditure ratio, net profit margin, and return on equity variables are all included in the research. Sub-variables have not been considered at all. The study's conclusion that the loss ratio has a beneficial impact on insurance firms' net profit margin emphasizes the significance of efficient risk management. On the other hand, the claim paid and costs ratio had little effect on the net profit margin. To increase profitability, insurance firms should concentrate on optimizing their loss ratio via meticulous underwriting and claims administration. The observations have important ramifications for business professionals looking to maintain a competitive advantage. Other variables impacting net profit margin in the insurance industry should be investigated in more detail. Keywords: Claim Paid, Return on equity, Net profit margin, Expenses Ratio and Loss Ratio