Page 18 - Insurance Times June 2024

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Nepal: Above normal people this year. "We are bringing a crops, and 29.8 percent of households
disaster management strategy soon to noted the appearance of new diseases
monsoon rain may affect tackle the problems. We are mobilising in their livestock.
farmers around 35,000 security personnel in di-
Every year, adverse weather events saster-prone areas as part of our pre- Life insurance set to boom
such as drought, excessive rainfall, and paredness plan.” According to Pandey,
storms cause huge losses to farmers in this year, Gandaki Province will be the as interest rates surge,
Asia and beyond. This year, South Asian most affected area as it may receive 60 says Swiss Re Institute
meteorologists have said that most of percent more rainfall than the usual Higher interest rates around the world
South Asia, including Nepal, will re- monsoon rains. “If we prepare early, are transforming the outlook for life
we can save lives and properties.”
ceive above-normal monsoon rainfall, insurance growth and profitability.
Nepal’s agriculture sector is the main-
which is good for Nepal’s rain-fed agri- Savings products are attractive to con-
culture system. stay of the country’s economy. It con- sumers after a decade of weak de-
tributes 24.60 percent to the country's
But experts say it is also a warning GDP and employs over half of the popu- mand and low returns. Swiss Re Insti-
sign. Excessive rainfall brings disaster lation. The sector is mainly rain-fed and tute expects a new high for US fixed
and may offset economic gains. They heavily dependent on rainfall. annuity sales this year after record
say agricultural insurance can protect sales in both 2022 and 2023.
farmers by covering losses from ad- When there is not enough rain, the GDP Jérôme Jean Haegeli, Swiss Re's Group
verse weather events. This can help tumbles. This dependence makes the Chief Economist, says: "Higher interest
country particularly vulnerable to the
farmers maintain their income and rates are a game changer, providing
adverse impacts of climate change.
continue farming even if a harvest is life insurance and pension products a
According to the National Climate
lost. “This monsoon, we have pro- Change Survey 2022, the second of its tailwind to much better tackle the re-
jected to witness 35 percent to 55 kind, released by the National Statis- tirement savings challenges of ageing
percent more rains than usual,” said tics Office recently, the economic losses demographics. Savings products are
Bharat Mani Pandey, joint secretary at in both farm and off-farm sectors in attractive again as a direct conse-
the National Disaster Risk Reduction quence of normalising interest rates.
the last five years, as reported by
and Management Authority, during an Higher investment yields also benefit
households, excluding significant infra-
orientation on insurance and risk fi- structure damages, amounted to long-duration protection products."
nance, jointly organised by the United Rs415.44 billion. The survey report said In its new sigma study, "Life insurance
Nations Development Programme that over the past 25 years, due to cli- in the higher interest rate era: asset-
(UNDP) and Society Of Economic Jour- mate change, approximately 50 per- savvy is the new asset-light", Swiss Re
nalists-Nepal. cent of households reported the emer- Institute forecasts an additional USD
According to Pandey, the monsoon, gence of new diseases in their crops, 1.5 trillion in global insurance savings
which begins in mid-June and ends in 53.9 percent observed the presence of premiums over the next decade, as
early October, may affect 1.8 million new insects or pests affecting their consumers are moving to buy life-sav-

The Insurance Times June 2024 17