15th August 2025, Kathmandu
Sanima Reliance Life Insurance Company Limited has released its financial results for the fiscal year 2024/25, revealing a year of strategic growth.
Sanima Reliance Profit Growth
The company reported a net profit of NPR 377.4 million, a 7.6% increase from the previous year. While this profit growth is a positive sign of operational efficiency, the company’s performance is best defined by a remarkable 34.6% expansion of its life fund and a double-digit rise in premium collections. This signals a strong focus on long-term stability and business expansion, which are critical for a life insurance company’s sustained success.
The Heart of the Business: Why Life Fund Growth Is Paramount
For a life insurance company, the life fund is the most vital metric of long-term health. It represents the pool of money collected from policyholders’ premiums and the returns on investments of that money. From this fund, future claims and policy benefits are paid out. Therefore, a larger life fund indicates a stronger and more secure financial position to meet policy obligations. Sanima Reliance Life Insurance’s life fund saw a phenomenal 34.6% growth, expanding from NPR 14.337 billion to a solid NPR 19.29 billion. This achievement reflects not only the company’s ability to attract a growing number of policyholders but also its success in managing investments to generate returns. This growth is a powerful indicator of policyholder trust and the company’s long-term sustainability.
Strong Premium Collections Drive Revenue and Market Share
The expansion of the life fund was directly fueled by a robust performance in premium collections. The company saw a 13.22% increase in total gross premiums, collecting NPR 7.53 billion. Even more significantly, its net premium income—the premium retained after payments to reinsurers—grew by 15.29% to NPR 6.76 billion. A higher net premium income reflects a healthier business because it means the company is successfully attracting customers and retaining a larger share of the premiums for its own operations and life fund. This double-digit growth in premium income underscores the company’s expanding market presence, effective sales strategies, and growing brand reputation in Nepal’s competitive insurance sector.
Navigating the Numbers: Profitability and Shareholder Metrics
Despite the 7.6% growth in net profit, the company’s annualized earnings per share (EPS) experienced a slight decline to NPR 7.53 from NPR 8.38. This paradox can be explained by the relationship between profit and the number of outstanding shares. A drop in EPS, even with a rise in net profit, can occur if the number of outstanding shares has increased due to prior issuance of new shares. The financial report also shows a decrease in retained earnings from NPR 1.242 billion to NPR 342.6 million. This is likely due to the allocation of earnings to other reserves or the distribution of dividends in the previous fiscal year, rather than a sign of financial distress.
For investors, the market’s confidence in Sanima Reliance Life Insurance’s future is reflected in its high price-to-earnings (P/E) ratio of 54.47 times. This indicates that investors are willing to pay a premium for the stock, anticipating strong future earnings growth. The company’s net worth per share of NPR 111.59 also demonstrates solid asset backing and financial resilience.
Strategic Outlook and Conclusion
Sanima Reliance Life Insurance’s performance in FY 2081/82 highlights a strategic approach focused on long-term stability and business growth. The company successfully boosted its profitability while making remarkable gains in its core business metrics: the life fund and premium income. This dual achievement, combined with a strong capital base and growing catastrophe reserves, positions the company well for sustainable growth in Nepal’s life insurance industry. Moving forward, the company’s challenge will be to translate its expanding market presence and impressive premium growth into a corresponding increase in shareholder value and profitability.
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