Kathmandu: Despite a significant downturn in the broader stock market, Nepal Reinsurance Company saw its share price soar to the positive circuit limit on Monday.
While the Nepal Stock Exchange (NEPSE) index tumbled by 26.72 points to settle at 2755.37, Nepal Reinsurance Company defied the bearish trend, recording a massive 14.99 percent increase in its valuation.
The company also witnessed intense trading activity, with its daily turnover reaching a substantial Rs 371.3 million as investors scrambled to buy into the stock.
This sudden surge in investor confidence is directly linked to the favourable policy shifts announced by Finance Minister Dr Swarnim Wagle in the upcoming fiscal year’s budget. The government has proposed a mandatory provision requiring domestic insurance companies to channel at least 20 percent of their total reinsurance business through the Nepal Reinsurance Company.
Furthermore, the budget stipulates that the leadership and operational management of collective insurance funds for long-term insurance policies will now be centralized under the company, significantly expanding its business scope and institutional authority.
The budget has also introduced several reforms designed to deepen insurance penetration, which will indirectly provide a boost to the reinsurance sector. These measures include a long-awaited increase in the third-party insurance limit to Rs 1 million and the introduction of mandatory insurance for accidents, critical illnesses, and cargo transport.
Additionally, the government has moved to make insurance a prerequisite for building construction approvals in urban areas, a policy expected to generate a massive influx of premium income and stabilize the industry’s risk profile by diversifying its portfolio.
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