“Insurance is important when income is low”

Insurance, like all sectors of the economy, has been hit hard by the Covid-19 pandemic. The major impact was on the premiums of certain branches of activity and on the premature deaths of people. While the lack of insurance awareness has kept many people from purchasing coverage, the coronavirus has wiped out economic activity, which has had a profound impact on the industry. The Post’s Krishana Prasain spoke with Nirmal Kajee Shrestha, vice president and general manager of MetLife Nepal, a US-based insurance company that opened a branch in Nepal in 2001, about the effect of the pandemic and how the company is dealing with the current crisis.

How do you assess the insurance market in Nepal, in particular, before and after the earthquakes of 2015?

The level of awareness has increased in both the life and non-life insurance sectors, which has resulted in a significant increase in the number of insurance companies in Nepal. The earthquakes of 2015 brought many changes in the behavior of customers in relation to the calamity that Nepal has been experiencing for decades. Before the earthquakes, there was a general understanding among people that insurance companies mostly delay the claim or they don’t release the claim at all. This perspective has changed. People are now aware of the uncertainties and future losses.

A crisis like that of Covid-19 has affected all sectors of activity. So how is the insurance industry likely to adapt to the ongoing crisis?

The pandemic has challenged the entire economy. It has also had an impact on the insurance industry. To cope with the crisis, insurance companies are implementing products that are inexpensive and offer maximum coverage. Insurance companies have also provided premium time off, which means consumers have had a certain period in which they can take a break from paying the premium due to difficulties related to Covid-19.

Insurance generally means minimizing uncertainties and future losses. Are the majority of Nepalese aware of insurance?

When MetLife Nepal made its foray into Nepal in 2001, it began to raise awareness of the benefits of insurance. We currently have over 7,000 representatives involved in outreach at the local level. We have over 26 microfinance partners covering the 77 districts. The number of complaints is high, and this also helps to create awareness. They say insurance companies sell their products, but in reality, we are here to sell solutions. People must realize that they have to secure the future by saving a small amount; and for that, insurance is the best way.

Is there a possibility to introduce new life insurance policies? Can life insurance companies launch products covering such pandemics?

MetLife is still a customer-centric business. The customer’s need increases over time and with increasing uncertainties, and we are pioneers in this area. We conducted a study on new customer needs and introduced the LifeCare-Beautiful policy targeting women. It provides coverage against nine dreaded diseases specific to listed women as well as loss of life such as cancer. We have received an international award for introducing this policy. We have a product development team, and they are researching what is needed in the Nepalese market. We will continue to meet the needs of the people. It depends on how we say pandemics are covered. While MetLife Nepal’s policies cover pandemics, it is difficult to analyze the risk of a pandemic. To mitigate the risk, the right pricing and offering is necessary, which we do.

Life insurance in Nepal has yet to catch on, although it does provide financial security for you and your family. Is it due to low income or are there other factors?

Awareness is the main factor behind this. Insurance is not expensive when you opt for savings products. Insurance is important when income is low, and it is a myth that insurance products are expensive in the market. Insurance is understood more as savings and less as protection. If the income level is lower then it is more important to have protection. Significant insurance coverage can be done reasonably priced from the protection part as it can be done in Rs500-700. This is called term life insurance which provides maximum coverage at a reasonable price. Microinsurance has the same objective. Insurance can be taken out for Rs70 which provides coverage of Rs10,000-15,000. For microfinance, in the event of the death of an entrepreneur who has taken out a loan to operate a business and has taken out insurance, then the loan is repaid by the business. We have 600,000 clients who are in the lower income bracket and live below the poverty line.

Various digital media are used for the payment of premiums. How easy and reliable are these services?

MetLife Nepal is the first insurance company to launch a digital premium payment service a few years ago. However, we promoted digital payment mainly after the pandemic. Payment can be made through digital wallets or Connect IPS. The digital payment service is reliable and we always focus on information technology security. We partner with a digital payment method once approved by the international security system. We focus on online payment and offer some services through our user-friendly official mobile app. There will be a huge revolution in digital payment over the next five years, and we are focused on expanding our services through digital medium.

What are the different insurance plans offered by MetLife Nepal?

The company has introduced different solutions to life issues like health, education, credit, and corporate office workers. We have had many seminars that have helped people think about insurance. Recently, we launched a My Confidence My MetLife campaign which has become effective.

How has Covid-19 impacted MetLife? And what is the future direction of MetLife Nepal after the pandemic?

The pandemic challenged us, tested our patience and also gave us the opportunity to learn. We had our business continuity plan whereby we didn’t have to stop for a single day to provide our services to clients. We focused on the health safety of the entire team working with us and also managed to do business digitally for a while. It’s digital. And we must be pioneers in this area. We will introduce new products and develop talents to provide the best services to customers.

About Ellen Lewandowski

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