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FOR IMMEDIATE RELEASE
OLDWICK - SEPTEMBER 24, 2025 09:11 AM (EDT)
Insured losses from the recent rioting in Kathmandu are expected to be material given that even modest claims can weigh heavily on Nepal’s relatively small non-life insurance market, according to a new AM Best commentary.
The riots, widely referred to as the “Gen Z” protest, have underscored the vulnerability of Nepal’s insurers and reinsurers to socio-political instability. The Best’s Commentary, “Riots Impose Financial Strain on Nepal’s Insurers and Reinsurers,” states that while many damaged assets are expected to be uninsured, policy extensions typically cover private properties for riots, strikes, malicious damage, sabotage and terrorism (RSMDST) risks. There is limited visibility around the full extent of insured and economic claims, but gross insured losses reported by the Nepal Insurance Authority have already reached a magnitude like that of the deadly 2015 Nepal earthquake.
“The outsized proportion of losses arising from widespread riots highlights the likelihood of earnings and capital impacts on the market, especially if claims continue to escalate,” said Susan Tan, senior financial analyst, AM Best.
Capital pressure on Nepal’s domestic reinsurers is also likely, though retrocession may partially alleviate financial stress. Notwithstanding, elevated retention of RSMDST exposures may still erode their capital buffers, reducing their ability to withstand subsequent shocks over the near term.
To access the full copy of this commentary, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=358212.