LIC Nepal AA- Rating Upgrade Shows Strong Growth
25th March 2026, Kathmandu
Life Insurance Corporation (Nepal) Limited (LICN) has achieved a major milestone in its financial trajectory with a credit rating upgrade to [ICRANP-IR] AA- (Double A Minus) from ICRA Nepal.
LIC Nepal AA- Rating
This upgrade, officially recognized as of March 2026, signifies a “high degree of safety” in the company’s ability to service its financial obligations and reflects a very low credit risk. The transition from the previous A Plus rating underscores the company’s reinforced capital structure and its resilient performance within Nepal’s evolving insurance landscape.
Understanding the Double A Minus Upgrade
A credit rating is an essential barometer of trust for an insurance company. The move to AA- indicates that LIC Nepal has reached a tier of financial reliability reserved for top-tier institutions.
Safety Level: “High degree of safety” regarding timely servicing of financial obligations.
Credit Risk: Categorized as “Very Low.”
Market Position: As the second-largest life insurer in Nepal by asset base, the upgrade solidifies its competitive edge against both long-standing peers and newer market entrants.
Strategic Capital Expansion
The primary catalyst for this rating upgrade was LIC Nepal’s successful effort to meet the Rs 5 billion minimum paid-up capital requirement mandated by the Nepal Insurance Authority.
Rights Issue: The company successfully executed an 88.45% rights share issuance (approximately 23.46 million units), which concluded in early 2025.
Current Capital: Following the rights issue and subsequent bonus share distributions, the company’s paid-up capital has reached Rs 5.50 billion, providing a substantial cushion for operational growth and risk management.
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Solvency Strength: As of mid-July 2025, the company reported a robust solvency ratio of 1.61 (161%), significantly exceeding the regulatory minimum of 1.50 (150%). Recent industry reports suggest this has trended even higher toward 3.76 in early 2026, positioning LIC Nepal as one of the most financially secure insurers in the country.
Core Performance Metrics and Market Reach
LIC Nepal’s rating also factors in its consistent business recovery and disciplined investment strategies.
Premium Growth: After several years of industry-wide stagnation, LIC Nepal recorded a healthy increase in First Year Premiums (FYP) and renewal premiums, reaching nearly Rs 20 billion in total premium collection for the 2081/82 fiscal period.
Customer Retention: The policy persistency (renewal) rate improved to 95% in FY 2025, a sharp increase from 89% in the previous year, highlighting high levels of policyholder satisfaction.
Network Depth: The company manages a vast distribution network of 85 branches and over 13,800 agents, with a significant portion remaining highly active in rural and semi-urban clusters.
Investment and Governance Profile
The “AA-” rating is further supported by the company’s conservative yet high-yield investment portfolio.
Fixed Income Focus: Approximately 66% of its total investment book is placed in fixed deposits with commercial banks, ensuring predictable returns and liquidity.
Institutional Backing: The company is a joint venture between Life Insurance Corporation of India (55% stake) and the Vishal Group (15% stake). This strong promoter profile provides LIC Nepal with access to global best practices in actuarial science and risk assessment.
Conclusion
The LIC Nepal Double A Rating upgrade is more than just a symbol; it is a testament to the company’s successful navigation of capital restructuring and market competition. By surpassing the Rs 5 billion capital mark and maintaining a superior solvency profile, LIC Nepal has transitioned into a new era of financial dominance. For policyholders, this upgrade offers the ultimate peace of mind: the assurance that their long-term financial security is backed by one of the most stable institutions in the nation.
For More: LIC Nepal AA- Rating
