Kathmandu. The reduction in the interest rate on institutional fixed deposits by commercial banks has affected not only banks but also life insurance companies.

Insurance companies keep a large amount of money in bank fixed deposits. When the interest rate of the bank decreases, it affects the profit of the life insurance company, as well as dividends and bonuses given to the insured.

Insurance companies have published their unaudited financial statements for the end of the last fiscal year.

Life insurance companies have earned a profit of Rs 5.44 billion in the last fiscal year. The profit was 10.53 percent lower than the corresponding period of the previous year. The company had posted a net profit of Rs 6.08 billion in the same period of the previous year.

According to the financial details made public by the insurance company, out of 14 life insurance companies, the profit of five companies has decreased while the profit of the remaining companies has improved.

In the same period last year, Nepal Life Insurance Ltd (22.84 percent), Sun Nepal Life Insurance (22.84 percent) to Rs 418.59 million, Met Life Insurance (55.29 percent), National Life Insurance (10.23 percent) to Rs 376,16,000 and Himalayan Life Insurance (41.90 percent) declined to Rs 31.77 crore.

Similarly, the government-owned National Life Insurance Company has also made a loss. The company had posted a loss of Rs 2.38 crore at the end of the last fiscal year. The profit of the remaining 8 companies has increased.

IME Life Insurance was among the top gainers in the last fiscal year. IME Life earned a net profit of Rs 58.42 crore. The profit increased by 0.16 percent compared to the corresponding period of the previous year.

Similarly, Reliable Nepal Life Insurance was the second highest profitable company with Rs 58.26 crore. Himalayan Life is the biggest gainer. The company has a net profit of Rs 31.77 crore.