Most Non-life Insurance Stocks Fall Close to 52-week Low

The prices of most non-life insurance companies have dropped sharply in the recent market decline. As the NEPSE index fell below the 2,500 mark, the shares of many insurance companies touched or neared their 52-week low levels.

Many insurance stocks are under pressure due to rising claim liabilities and low investor confidence. Some share prices have also adjusted because of bonus and right share distributions, but not all declines are due to these adjustments. The overall fall in the market has affected nearly all listed companies, with the insurance sector being hit the hardest.

Rising claim burden adds more pressure

Non-life insurers are facing increasing claim settlements after floods, landslides, and the recent “Gen Z” protests. According to the Nepal Insurance Authority, companies still have to pay insurance claims worth more than Rs 23 billion related to these events. Additionally, another Rs 3.26 billion in claims has been filed due to recent natural disasters.

These large liabilities are hurting profits and reducing dividend potential. Investors now believe that many insurance firms may not distribute dividends for a few years.

Investors turn toward low-cap companies

In the current market, many traders are more interested in small-cap and ultra-low-cap stocks. As a result, insurance companies have been pushed to the sidelines. Since most insurers have mid-level capital and growing liabilities, their stock prices could still fall further in the coming days.

Insurance Companies Near 52-Week Low Prices

Experts warn that if market sentiment does not improve soon, insurance shares might face another downward phase. Investors are advised to stay cautious and focus on long-term fundamentals rather than short-term fluctuations.