Sagarmatha Insurance Company and Lumbini General Insurance Company have signed the final agreement for the merger. Both companies signed the final agreement on Tuesday. The agreement was signed by Manohar Das Mull, Chairman of Lumbini General Insurance, and Ramakrishna Manandhar, Chairman of Sagarmatha Insurance. As per the agreement, the name of the new entity formed after the merger will be Sagarmatha Lumbini Insurance Company Limited. A special proposal regarding the merger will be tabled in the upcoming general meetings of both companies. Based on the initial agreement between the two companies and the DDA report, the share swap ratio will be maintained at 100:80.

Post-merger, the paid-up capital of the company will be Rs 2.62 billion. There will be three each from Sagarmatha Insurance and Lumbini General Insurance on the board of the Sagarmatha Lumbini Insurance Company. The current CEO of Sagarmatha Insurance Chunki Chhetri will be the chief executive officer of the Sagarmatha Lumbini General Insurance Company.

The merger drive in the Nepali insurance sector is in full swing. In the last one year, a series of merger agreements have been signed among both, life insurance and non-life insurance companies. The merger momentum in the Nepali insurance sector intensified after the Nepal Insurance Authority (NIA) increased the minimum paid-up capital requirements for insurers of both categories. The authority has increased the paid-up capital of non-life insurance companies to Rs 2 billion while it is Rs 5 billion for life insurance companies. The authority has been pushing for consolidation in the Nepali insurance sector since the new Chairman Surya Silwal took charge of NIA. Of the 19 insurance companies involved in the merger process, six companies have merged to become three and have started their integrated business while 13 others are still in the process of completing their merger process. According to NIA, 10 non-life insurance companies have signed merger MoUs to become five, while nine life insurance companies have also signed merger deals to become four entities. So far, two life insurance companies and 4 non-life insurance companies have completed the merger process and started their integration business. The remaining seven life insurance companies and six non-life insurance companies have not been able to start integrated businesses yet. There have been two successful mergers in the non-life insurance sector in the past year. In July 2022, Himalayan General Insurance and Everest Insurance merged to form Himalayan Everest Insurance Insurance Co. Ltd. Similarly, in October, Sanima General Insurance and General Insurance Company merged to form Sanima GIC Insurance Ltd. The first merger among the life insurance companies took place in the last week of December 2022 when two life insurance companies - Surya Life Insurance and Jyoti Life Insurance - completed their merger process and started integrated business as Suryajyoti Life Insurance Company.