Nepal

Overview

Nepal is highly vulnerable to earthquakes, landslides, floods and droughts, and climate change is increasing risk. Nepal ranks as the country 10th most affected by extreme weather events in terms of fatalities and economic losses. Expenditure data shows that between 2012 and 2020, the Government of Nepal spent an average of NPR 50 billion (approximately US$400 million) annually, and the costs of disaster response are growing. Insurance and risk finance can provide solutions that bolster financial resilience for government and individuals.
Working with the government, private sector partners and the international community, UNDP is building institutional capacity and improving the enabling environment for insurance market development and improved disaster risk management to protect lives, livelihoods, infrastructure and biodiversity in Nepal.

Main Natural Hazards

Earthquake, Flood

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Source:

https://drmkc.jrc.ec.europa.eu/inform-index/INFORM-Risk/Country-Risk-Profile}

Insurance penetration

3.6% (2022)

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¹
Source:

https://irff.undp.org/sites/default/files/2024-04/nepal.diagnostic.pdf}

Number of insurance providers

15 life insurers, 15 non-life insurers, 2 reinsurers and 4 microinsurance companies

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¹
Source:

https://irff.undp.org/sites/default/files/2024-04/nepal.diagnostic.pdf}

% Workforce engaged in agriculture

61% (2022)

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Source:

https://data.worldbank.org/indicator/SL.AGR.EMPL.ZS}

Multidimensional poverty

17.7% (2019)

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¹
Source:

https://hdr.undp.org/system/files/documents/hdp-document/2023mpireporten.pdf}

% of population covered by inclusive insurance products

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¹
Source:
The Microinsurance Network, Landscape of Microinsurance 2023, Based on target population estimate for Nepal of 23,873,461 people https://microinsurancenetwork.org/resources/the-landscape-of-microinsurance-2023}

Biodiversity ranking

#49 out of 239 countries and territories (2023)

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Source:

https://worldrainforests.com/03highest_biodiversity.htm}

Small business % contribution to workforce

92% of private sector employment (2018)

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Source:

https://fncci.org/uploads/publication/file/Report_StatePSNepal_20230519064735.pdf}

Our work in numbers

1

Insurance solutions in development

Protecting people, jobs, agriculture and public assets.

3

Institutional and policy processes

Strengthening the enabling environment for insurance to scale.

180

Training programme participants

Building country capacity in insurance and risk finance.

Our projects

Improving the environment for insurance, risk finance and biodiversity
The Tripartite Agreement (TPA) is a public-private partnership between UNDP, 20 of the world’s largest insurers under the Insurance Development Forum, and the German Federal Ministry of Economic Cooperation and Development (BMZ).
Through TPA, UNDP is working with Nepal’s government and industry partners to review regulatory frameworks for insurance and risk finance and develop a sub-sovereign parametric flood insurance scheme for Nepal that protects public assets, improves government financial resilience, and safeguards access to basic services among vulnerable groups.
UNDP is also working with the Biodiversity Finance Initiative (BIOFIN) on human-wildlife conflict insurance.

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Increasing actuarial capacity to improve financial risk management
The UNDP Milliman Global Actuarial Initiative (GAIN) aims to help countries predict and prepare for risks by increasing actuarial capacity, enabling better risk modelling and more accurate pricing of insurance and social protection mechanisms. In cooperation with government and industry, the GAIN initiative is working to improve actuarial capacity in Nepal through training opportunities, mentorship arrangements and support for local actuarial professionals.

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