News of Insurance – While most insurance companies continue to allocate around 80% of their investable funds in fixed deposits with banks, Reliable Life Insurance has introduced a new approach. With declining interest rates affecting insurance companies’ earnings, firms are actively seeking alternative investment avenues.

According to the Nepal Insurance Authority, five companies have already established investment subsidiaries, with others submitting similar proposals. The authority’s Chief Accountant, Virodh Wagle, confirmed this development.

Amid this trend, Reliable Life Insurance has taken a step further by introducing the concept of a mutual fund. The company has established a subsidiary named Reliable Capital Investment & Merchant to diversify its investments.

Starting from April 15, 2025 (Baisakh 3, 2082), the company will offer units of its new mutual fund, Reliable Prosperity Scheme, for public subscription. The scheme will issue 100 million units, each with a face value of NPR 10, aiming to raise NPR 1 billion. Deputy General Manager Dipendra Kadariya shared this information with News of Insurance.

A First in Nepal’s Insurance Industry

Sanima Capital has been designated as the issue and sales manager for the fund, which marks a pioneering initiative in Nepal’s insurance sector. According to Kadariya, the response to the scheme has been overwhelmingly positive.

How Does the Scheme Work?

Kadariya explained that from April 15, units will be available for purchase via the Mero Share platform. Once subscribed, the investments will be allocated across different asset classes, with 60% in listed securities (secondary market), a portion in bonds and debentures, and the remainder in bank deposits.

Objectives of the ‘Reliable Prosperity Scheme’

The mutual fund operates within a regulatory guideline that dictates its investment scope. Reliable Life Insurance has become the first in the sector to launch such an initiative, making it a groundbreaking move in Nepal’s insurance industry.

Who Can Invest and What Are the Benefits?

This scheme is designed for all types of investors, including small-scale investors who may lack access to information, research, or technological resources. Kadariya assured that the scheme poses minimal risk, as it operates under strict regulation by the Securities Board of Nepal (SEBON) and follows well-defined investment guidelines. A supervisory team will continuously monitor the fund’s performance to ensure transparency and security for investors.

Impact on Nepal’s Insurance Sector

Kadariya highlighted that this initiative aims to open up new investment opportunities in the insurance sector. The introduction of a mutual fund in the insurance industry is a historic first, and the response so far has been positive. Reliable Capital Investment & Merchant, a subsidiary of Reliable Life Insurance, will manage the fund and charge a fixed fee for its services.

With this innovative approach, Reliable Life Insurance is setting a new precedent in Nepal’s insurance sector, paving the way for future investment diversification.