15th August 2025, Kathmandu
National Life Insurance Company Limited faced a sharp 56.22% decline in its net profit for fiscal year 2024/25, settling at NPR 412.8 million from NPR 942.8 million.
National Life Boasts Profit
This downturn was primarily due to higher claims and operational costs. However, the company demonstrated resilience and long-term strength with significant growth in its core business areas.
Key Takeaways from the Financial Report
The financial report presents a mixed yet strategically sound picture. While the drop in net profit is significant, the company’s performance in other key metrics indicates underlying business health.
Profitability vs. Business Growth: The sharp decline in profit and Earnings Per Share (EPS), which fell to NPR 7.92, contrasts with strong growth in the company’s core operations. This divergence is likely a result of increased claims, a common occurrence in the insurance sector that can be volatile year-on-year.
Life Insurance Fund Expansion: The company’s life fund, which is the repository of policyholder premiums and investment returns, grew by 13.8% to reach NPR 8.991 billion. This growth is a crucial indicator of customer trust and the company’s ability to build a robust financial foundation to meet future policyholder obligations.
Steady Premium Collections: National Life Insurance maintained a strong market presence, with its gross premiums growing by 6.5% to NPR 21.822 billion. Similarly, net premiums increased by 7.03% to NPR 21.472 billion. This consistent rise in premium income confirms the company’s ability to attract and retain a growing base of policyholders.
Navigating the Numbers: Financial Health and Shareholder Value
Despite the reduced profitability, National Life Insurance’s financial health remains robust. The company’s net worth per share stands at NPR 129.72, reflecting a solid asset base that provides a buffer against financial volatility. The company also strategically increased its catastrophe reserve to NPR 667.2 million, strengthening its capacity to handle large, unforeseen claim events. Although retained earnings decreased, this is a direct result of the lower net profit and not an indication of a fundamental business issue. The company’s P/E ratio of 78.73 indicates high investor optimism, suggesting the market views the profit decline as a short-term hurdle and has confidence in the company’s long-term growth trajectory, driven by its expanding life fund and premium collections.
Strategic Outlook and Conclusion
National Life Insurance’s FY 2024/25 performance highlights the trade-off between short-term profitability and long-term business stability. By absorbing higher claims and expenses, the company maintained steady growth in its fundamental business indicators—premiums and life fund. This strategic approach ensures the company’s resilience and its ability to secure policyholders’ interests, even during a challenging year. Going forward, the company’s focus will likely be on improving operational efficiency and managing claims more effectively to translate its strong top-line growth into higher profitability, thereby strengthening investor and policyholder confidence.
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