15th August 2025, Kathmandu
IME Life Insurance Company Limited’s financial results for the fiscal year 2024/25 present a nuanced picture of a company facing short-term profit challenges while achieving significant long-term business expansion.
IME Life’s Financial Results
The company reported a net profit of NPR 583.3 million, which is a 5.56% decline from the previous year’s NPR 617.4 million. However, a deeper analysis of the financial report reveals strong underlying growth in key operational areas, highlighting the company’s resilience and robust market strategy.
Profit Decline vs. Strong Business Momentum
While a decline in net profit may seem concerning at first glance, the context provided by other financial indicators is crucial. The decrease in earnings was attributed to changes in operational costs and other market factors, which can be common in the competitive and highly regulated insurance sector. Despite this, the company showed significant progress in areas that are vital for long-term growth and stability.
The most prominent achievements of the fiscal year were in business momentum and expansion. The company’s life insurance fund grew by a remarkable 42.97%, reaching NPR 13.109 billion from NPR 9.1688 billion. This is a powerful indicator of a growing policyholder base and a strengthening of the company’s ability to meet future claim obligations. Similarly, both total and net premium collections saw double-digit growth. Total premium income increased by 19.22% to NPR 5.6525 billion, while net premium income grew by an even faster 21.21% to NPR 5.4949 billion. This demonstrates increased customer trust, effective marketing, and a wider distribution network.
Strengthening the Foundation: Capital and Reserves
A key aspect of an insurance company’s financial health is its ability to manage risk and maintain a strong capital base. In this regard, IME Life Insurance’s performance was positive. The company substantially increased its catastrophe reserves to NPR 2.553 billion from NPR 1.932 billion. Catastrophe reserves are a crucial component of an insurer’s balance sheet, designed to cover large, unforeseen claim events. The significant increase in these reserves strengthens the company’s risk management capabilities and ensures better preparedness for any major disasters or claim surges.
Although retained earnings saw a decline from NPR 1.1522 billion to NPR 655.4 million, the growth in catastrophe reserves and the overall robust equity position, including other equity of NPR 494.4 million, provide a solid foundation for the company’s future growth and stability. The total equity structure remains strong, providing a buffer against market volatility and a base for future business expansion.
Shareholder Value and Future Outlook
For investors, the company’s performance in FY 2024/25 presents a mixed picture but with a positive long-term outlook. The decline in net profit resulted in a drop in annualized earnings per share (EPS) from NPR 12.35 to NPR 11.67. However, the market’s perspective, as indicated by the price-to-earnings (P/E) ratio of 39.60 times, suggests continued optimism about the company’s future growth. This is further supported by the net worth per share of NPR 138.58, which demonstrates solid asset backing.
In conclusion, IME Life Insurance’s financial results for FY 2024/25 highlight a strategic trade-off. The company prioritized long-term business growth and risk management by expanding its insurance fund and boosting premium collections, even at the expense of a minor dip in short-term net profit. This strategy, coupled with a robust reserve fund and a strong equity position, suggests that IME Life Insurance is well-positioned to leverage its growing market presence and customer base for sustainable and profitable growth in the coming years.
For More: IME Life’s Financial Results