Dip Prakash Panday, general manager of Shikhar Insurance, has blazed into Nepal's insurance market like a meteor. He talked to Nepali Times about the future of the business in these troubled times.

Nepali Times: Has your aggressive launch campaign paid off?
Dip Prakash Panday: Yes, we completed 100 working days and it has paid off very well. Aviation is our highest premium generating sector and insuring motor vehicles has really gone up.

But people used to say the insurance market was saturated.
That's true, but we had a good chance at the market share. It is not that we want to grab the whole existing market but we want to increase the cake size also by introducing products and developing manpower. We are trying to secure reinsurance support from new reinsurance companies to build market capacity so we can accept reinsurance from other companies and give them reinsurance. This way, with reinsurance within the country, the money stays here.

How professional is the insurance business in Nepal?
Insurance business is not being run the way it should and is not professionally managed here. There is a shortage of technical manpower. Because of lack of awareness and education, people feel that money paid for insurance is a waste. We need to create an image that tells the people insurance is a must, that's the challenge.

So how do you expand the cake?
The market is huge but the stagnant economy of the country has affected it. Another factor is the purchasing power. These are long-term social securities where if something happens tomorrow, you can be rescued.

Where do you want to see the sector headed?
Personalised products, old products will be modified and new products developed. Some will be just products repackaged but right now, I see tremendous potential in tourism and aviation related insurance. We can provide security to tourists from the day they enter to the day they leave. All through customer services.

How about the overseas migrant worker market?
Nepalis going abroad are learning the benefits of insurance. There is a provision with which they can insure for a certain time period while abroad. The government and Insurance Committee are also deciding on this issue. They plan to sell insurance with more coverage and benefits, even for natural death.

With the insurgency and street violence, how easy is it to claim insurance?
We move with the times. The traditional procedure is lengthy, monotonous and tedious. Customers get frustrated and have a negative image of the market. If you can justify yourself, why ask for police claims? We don't ask for them except for legal claims when third party is involved or a case is registered in court. For motor vehicles, we have appointed different garages in the Valley.

What about reinsurance against damages due to conflict?
After 9/11 most reinsurers withdrew terrorism cover. All Nepali companies purchased a common reinsurance that is still continuing. This has become the Nepal Terrorism Pool. Some things still need to be tackled but we have very good internal support. This makes it functional. Each company pays a certain percentage and if there's a loss, the pool pays. This way, political instability does not directly affect a company's performance. At least for one segment, all the companies here united and found in solidarity a solution for the benefit of all. That's good teamwork display from all the companies.

What is the biggest problem you face?
Undercutting, rate undercutting is the biggest problem here. As an insurance company, we want to have a common understanding, go to the regulators and discuss the problem. Let's hope it is just a passing phase. The intention should not be to form a cartel and charge clients more but we need to study the products and see which has profit potential and price it accordingly. After all,insurance is fund management.