ICRA Nepal Reaffirms Liberty Micro Life Insurance Rating at ICRANP-IR BB Minus

13th October 2026, Kathmandu

ICRA Nepal has reaffirmed the issuer rating of Liberty Micro Life Insurance Limited at ICRANP-IR BB Minus, citing its stable capital foundation, expanded nationwide network, and strengthened reinsurance arrangements.

Liberty Micro BB Minus Rating

Credit Rating Overview and Financial Risk Profile

The reaffirmed credit rating offers a comprehensive perspective on the company’s overall creditworthiness and long-term financial solvency standing.

• Reaffirmed Rating Grade: ICRA Nepal assigned and reaffirmed the issuer rating at ICRANP-IR BB Minus on October 1, 2026.
• Risk Assessment: The assigned rating indicates a moderate risk level regarding the company’s capability to honor financial obligations in a timely manner.
• Scope of Rating: Reflects an overall opinion on general credit quality rather than a specific evaluation of individual debt instruments or bond issues.

Capital Base, Solvency Position, and Regulatory Supervision

The micro-insurer maintains capital adequacy well above current regulatory thresholds while preparing for upcoming risk-based capital mandates.

• Solvency Ratio Performance: Reported a solvency ratio of 1.99 times as of mid-July 2025, comfortably exceeding the Nepal Insurance Authority minimum requirement of 1.50 times.
• Paid-Up Capital Base: Stood at NPR 525 million (NPR 52.5 crore) as of mid-July 2026.
• Future Solvency Monitoring: ICRA Nepal will monitor capital adequacy retention under the risk-based solvency calculation system scheduled for implementation starting early 2028 (FY 2084/85).

Reinsurance Coverage and Catastrophe Risk Management

Liberty Micro Life has restructured its reinsurance arrangements to mitigate catastrophic claim loads associated with micro-insurance portfolios.

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• Reinsurance Enhancements: Catastrophic risk reinsurance coverage was increased for FY 2025/26, reducing net retained risk on the company’s balance sheet.
• Underwriting Protection: Enhanced reinsurance shields the business against potential claim spikes from natural disasters, catastrophic events, and flood impacts linked to microfinance-tied insurance portfolios.

Distribution Network Expansion and Agency Infrastructure

The insurer continues to build out its physical presence and agent ecosystem across Nepal to broaden access to micro-life insurance products.

• Service Network Scale: Operates through 23 branch offices and service points across Nepal.
• Agent Force Growth: Expanded its agent distribution network to 2,112 active agents as of mid-July 2026, comprising 2,099 individual agents and 13 corporate agents.
• Channel Collaborations: Drives business growth through active partnerships with microfinance institutions (MFIs) and local cooperatives.

Portfolio Mix, Channel Concentration, and Product Risks

Despite steady revenue streams, the company faces concentration risk from heavy reliance on term policies and institutional sales channels.

• Institutional Policy Share: Corporate policies and loan-linked insurance products contributed approximately 37 percent of total premium income in FY 2025/26.
• Product Concentration: Term insurance policies generated roughly 68 percent of total premium income in FY 2025/26.
• Foreign Employment Pool: Foreign employment term insurance pool allocations accounted for around 30 percent of total premium revenues.

Financial Performance, Shareholding Pattern, and IPO Plans

As one of three licensed micro-life insurance companies in Nepal, Liberty Micro Life is preparing to launch an initial public offering (IPO) in the near future.

• Earnings Summary: Recorded a net profit of NPR 460,000 for FY 2025/26, reflecting a 97 percent decline compared to the previous fiscal period due to early-stage operational expenses.
• Balance Sheet Asset Base: Total assets reached approximately NPR 1.043 billion (NPR 104.3 crore) as of mid-July 2026.
• Core Institutional Ownership: Langtang Investment Private Limited and Palldor Investment Private Limited hold equal 21.43 percent equity stakes in the company.
• Major Individual and Corporate Shareholders: Key investors include Kabita Lohia (9.52%), OP Holding Company Pvt. Ltd. (9.52%), Jagadamba Enterprises Pvt. Ltd. (6.86%), Remi Capfin Pvt. Ltd. (6.19%), and Godawari Fincorp Pvt. Ltd. (4.76%).
• Headquarters and Capital Market Strategy: Headquartered in Pokhara Metropolitan City-8, Kaski District, the company is finalizing preparations for a public equity offering (IPO) for general investors.

For More: Liberty Micro BB Minus Rating