7th October 2025, Kathmandu
The preliminary data of 2,988 claims totaling Rs. 23.39 billion (approximately US$170 million, based on prevailing exchange rates) demonstrates a clear distinction between the frequency of loss and the severity of loss
GenZ Movement Insurance Claims
The preliminary data of 2,988 claims totaling Rs. 23.39 billion (approximately US$170 million, based on prevailing exchange rates) demonstrates a clear distinction between the frequency of loss and the severity of loss:
- Motor Vehicle Insurance: High Volume, Lower Individual Value (74% of Claims)
- Volume: 2,209 claims (74% of the total 2,988 claims). This overwhelming proportion of claims directly reflects the nature of the protests, where vehicles were highly accessible targets for vandalism, arson, and collision. Motor vehicles, being common assets, offer a high volume of small-to-medium-sized claims.
- Value: Rs. 3.65 billion (approximately 15.6% of the total claim value). While the number of claims is highest, the aggregate claim amount is relatively low. This is typical for vehicle damage, which, even in cases of total loss, involves a smaller sum assured compared to large commercial properties.
Key Finding on Coverage Gap
The report emphasizes that a large number of damaged vehicles had no insurance coverage or only third-party policies. In Nepal, while Third-Party Liability (TPL) insurance is legally mandatory, it only covers damage/injury caused to a third party. Damage to the owner’s vehicle itself is covered only by a Comprehensive Insurance Policy, often supplemented by the Riot, Strike, Malicious Damage, Sabotage, and Terrorism (RSMDST) extension. The uninsured or TPL-only status of many private and, notably, over 1,200 damaged government vehicles, confirms that a significant portion of the economic loss will be borne by the owners and the government, not the insurers.
- Property Insurance: Lower Volume, High Individual Value (81% of Claim Value)
- Volume: 594 claims (approximately 20% of the total claims).
- Value: Rs. 19.03 billion (more than 81% of the total claim value). The extreme disparity between the volume and value here highlights that a few large-scale incidents—likely involving commercial buildings, factories, or major retail outlets—accounted for the bulk of the financial losses. This is a characteristic of major catastrophes where destruction to high-value infrastructure or contents drives up the total claim amount.
- Implications: The high property claim value signals a serious impact on the balance sheets of non-life insurance companies. As industry analysis suggests, property policies in Nepal often include the RSMDST extension, making these claims payable by the insurers, who then rely on their reinsurance and risk-sharing pool arrangements to manage the financial strain.
Geographic and Sectoral Concentration of Losses
The provincial data provides a clear picture of the movement’s epicenter and greatest impact:
Bagmati Province Dominance: Bagmati Province, which includes the capital, Kathmandu, recorded the most claims (1,608 or 54% of total claims) and, more significantly, the overwhelming majority of the total claim value (Rs. 18.04 billion or 77%). This is logical given Kathmandu’s status as the political, commercial, and financial hub, containing the highest concentration of high-value commercial properties, government offices, and vehicle traffic.
Other Provinces: Koshi, Madhesh, and Lumbini provinces follow in claim frequency, indicating the widespread, nationwide nature of the protests, though the financial severity in these regions is substantially lower than in the capital.
Other Claims: The presence of claims in Engineering and Contractor Risk Insurance (104 claims) and Transit Insurance (11 claims) suggests damage to construction sites, machinery, and goods being transported, which points to disruption across the supply chain and construction sectors.
Broader Economic and Regulatory Consequences
The data reveals two crucial concerns for the Nepali economy and insurance sector:
The Underinsurance Crisis: The report explicitly mentions that not all damaged structures were insured, and some were insured for amounts smaller than the actual losses. This problem of underinsurance, combined with the lack of comprehensive coverage for many vehicles, means that the overall economic loss is far greater than the insured loss. The Federation of Nepalese Chambers of Commerce and Industry (FNCCI) estimated private sector losses at around Rs. 80 billion nationwide. Comparing this to the Rs. 23.39 billion in claims received shows that only about 29% of the total private sector loss has been insured, leaving the vast majority (over Rs. 56 billion) to be absorbed directly by the affected businesses and individuals.
Strain on the Insurance Sector: The preliminary estimate of total claims reaching Rs. 25 billion is a massive figure for Nepal’s non-life insurance market, which is comparatively small. International credit rating agencies have warned that claims of this magnitude, which approach the scale of losses from the 2015 earthquake, will impose a significant financial strain on non-life insurers and domestic reinsurers, potentially eroding capital buffers and weakening their ability to absorb future shocks. The Nepal Insurance Authority (NIA) is facing pressure to expedite the loss assessment and claim settlement process while simultaneously maintaining the solvency and stability of the entire insurance market. The NIA has also amended its governance directives to allow insurance companies to contribute to the reconstruction of damaged structures as part of their corporate social responsibility, demonstrating a concerted effort to support the national recovery.
In conclusion, the insurance claim data from the GenZ movement provides a stark financial account of the social unrest. While the majority of claims are from damaged vehicles, the overwhelming majority of the cost is rooted in property damage, exposing a national vulnerability to civil unrest risks and underscoring the critical need for comprehensive insurance coverage and greater regulatory oversight to ensure the resilience of Nepal’s financial sector.
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