Multivariate Analysis of Nepalese Non-life Insurers’ Performance: Evidence from the CARAMEL Framework

Authors

Keywords:

Asset quality, capital adequacy, insurance sector, profitability, reinsurance

Abstract

Purpose: This study conducts a comprehensive multivariate evaluation of financial performance among selected Nepalese non-life insurers using the CARAMEL framework over the 2013/14–2021/22 period. It examines the influence of key financial dimensions on ROA and ROE, identifies patterns of strength and vulnerability, assesses the temporal stability of performance indicators, and develops a benchmarking tool tailored to Nepal’s evolving insurance landscape.

Design/methodology/approach: A causal-comparative research design is employed, utilizing panel data from 19 pre-merger non-life insurance companies over nine fiscal years (2013/14–2021/22). in Nepal from 2014 to 2022. Secondary data were analyzed using multivariate panel regression models.

Findings: Results show that capital adequacy, asset quality, management efficiency, and liquidity significantly influence financial performance, while the effects of reinsurance and earnings remain inconclusive.

Conclusion: The study advances the understanding of financial performance evaluation in Nepal’s non-life insurance sector by leveraging the CARAMEL framework and multivariate panel data analysis. The findings highlight the critical roles of capital adequacy, asset quality, and management efficiency in driving insurer performance, while the roles of reinsurance and earnings remain ambiguous, reflecting deeper institutional and operational constraints.

Implications: The study aspires to contribute meaningfully to the academic discourse and practical decision-making in the field of insurance management, empirically validate a multivariate framework that equips regulators, insurers, and policymakers in Nepal with actionable insights to enhance financial resilience, strategic decision-making, and sectoral governance.

Originality/value: The study advances insurance performance analysis by linking multidimensional financial indicators within the CARAMEL framework to profitability outcomes, offering a holistic understanding of the drivers behind insurer resilience and growth.

JEL Classification: G22, G32, C33, L25

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Author Biographies

Dipendra Karki, Faculty of Management, Nepal Commerce Campus, Tribhuvan University, Nepal.

Dr. Dipendra Karki is an Assistant Professor in the Faculty of Management at Tribhuvan University (TU), Nepal. He earned PhD in Finance from Kathmandu University School of Management (KUSOM). His teaching interests include Global Finance, Behavioural Finance, and Financial Economics. Dr. Karki is a published author, having written several articles and books

Bibek Dutta, Ace Institute of Management, Pokhara University, Nepal

Bibek Dutta is a researcher at Ace Institute of Management affiliated to Pokhara University, Nepal. He possesses a strong passion for research, actively participating in research activities for the past two years.

Rewan Kumar Dahal, Nepal Commerce Campus, Tribhuvan University, Nepal

Dr. Rewan Kumar Dahal is an Assistant Professor in the Faculty of Management at Tribhuvan University (TU), where he earned his PhD in Accountancy. His teaching interests include Management Accounting Techniques, Customer Satisfaction Management, Accounting Organizational Performance, and non-financial measures. He has more than 15 years of university teaching experience with different academic roles. Dr. Dahal has published numerous articles and books, notably including 'Taxation in Nepal'.

Binod Ghimire, Nepal Commerce Campus, Tribhuvan University, Nepal

Dr. Binod Ghimire is an Assistant Professor in the Faculty of Management at Tribhuvan University (TU), where he earned his PhD in management. He received His research area includes human resource management, financial management, and other organizational behavior issues. Dr. Ghimire has contributed many articles and books, notably including 'Human Resource Management'.

Surendra Prasad Joshi , Thames International College, Tribhuvan University, Nepal

Surendra Prasad Joshi serves as a faculty member at Thames International College, Kathmandu, which is affiliated with Tribhuvan University, Nepal. He holds a Master's degree in Management and focuses on research in higher education management. His teaching and research interests primarily revolve around management education in Nepal.

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Published

2025-07-28

How to Cite

Karki, D. ., Dutta, B., Dahal, R. K. ., Ghimire, B. ., & Joshi , S. P. . (2025). Multivariate Analysis of Nepalese Non-life Insurers’ Performance: Evidence from the CARAMEL Framework. Nepalese Journal of Insurance and Social Security, 8(1), 29–42. Retrieved from https://nepjol.info/index.php/njiss/article/view/82507

Issue

Vol. 8 No. 1 (2025)

Section

Articles

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