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Life Insurance Nepal (XNEP:LICN) ROE % Explanation
ROE % measures the rate of return on the ownership interest (shareholder's equity) of the common stock owners. It measures a firm's efficiency at generating profits from every unit of shareholders' equity (also known as net assets or assets minus liabilities). ROE % shows how well a company uses investment funds to generate earnings growth. ROE %s between 15% and 20% are considered desirable.
The factors that affect a company's ROE % can be illustrated with the three-step DuPont Analysis:
Note:
The net income data used here is four times the quarterly (Apr. 2026) net income data. The Revenue data used here is four times the quarterly (Apr. 2026) revenue data. The same rule applies to Pre-Tax Income and Operating Income.
* In the five-step DuPont Analysis, Operating Income is only available for non-financial companies. Thus, for Insurance companies, we use EBIT as a substitution of Operating Income. For Banks, both Operating Income and EBIT is unavailable. Thus we combined Interest Burden and Operating Margin % into Pretax Margin %, and the DuPont Analysis is divided into four components instead.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Be Aware
Net Income is used.
Because a company can increase its ROE % by having more financial leverage, it is important to watch the equity multiplier when investing in high ROE % companies. Like ROA %, ROE % is calculated with only 12 months data. Fluctuations in company's earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective.
Asset light businesses require very few assets to generate very high earnings. Their ROE %s can be extremely high.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
For the Insurance - Life subindustry, Life Insurance Nepal's ROE %, along with its competitors' market caps and ROE % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Life Insurance Nepal ROE % vs Insurance Industry
For the Insurance industry and Financial Services sector, Life Insurance Nepal's ROE % distribution charts can be found below:
* The bar in red indicates where Life Insurance Nepal's ROE % falls into.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
In the calculation of annual ROE %, the net income of the last fiscal year and the average total shareholder equity over the fiscal year are used. In calculating the quarterly data,
the net income data used here is four times the quarterly (Apr. 2026) net income data.
ROE % is displayed in the 30-year financial page.
Life Insurance Nepal (XNEP:LICN) has a ROE % of 3.98% as of Apr. 2026. Return on equity is the ratio of current-period net income to average two-period total equity. View historical data on Life Insurance Nepal and its competitors. This is 39% below median its historical median of 6.48. Over the past decade, Life Insurance Nepal's ROE % has ranged from 0.43 to 20.91. According to the industry distribution chart, Life Insurance Nepal ranks #411 out of 501 companies in the Insurance industry, placing it in the top 82%.
Is Life Insurance Nepal's ROE % too high?
Life Insurance Nepal's current ROE % of 3.98% is 39% below median its 10-year median of 6.48. Over the past 10 years, this metric has ranged from a low of 0.43 to a high of 20.91. The Insurance industry median ROE % is 11.64. Life Insurance Nepal's value of 3.98% is 65.8% below this industry median. Based on the distribution chart, Life Insurance Nepal ranks #411 out of 501 companies in the Insurance industry, which is in the bottom quartile relative to peers. Overall, Life Insurance Nepal has a GF Score™ of 82/100 and is considered Modestly Undervalued, reflecting its overall financial health beyond just this single metric.
How does Life Insurance Nepal's ROE % compare to AFL and MET?
According to the Insurance industry distribution chart, Life Insurance Nepal ranks #411 out of 501 companies for ROE %. This places Life Insurance Nepal in the lower half of its industry. The industry median ROE % is 11.64. Life Insurance Nepal's value of 3.98% is 65.8% below this benchmark. Historically, Life Insurance Nepal's own ROE % has ranged from 0.43 to 20.91 over the past decade. While the company's 10-year median is 6.48 vs. the industry median of 11.64, Life Insurance Nepal has consistently been below the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good ROE % for an Insurance company?
The median ROE % among Insurance companies is 11.64, based on 501 companies in the industry. Companies in the top quartile (top 25%) have a ROE % significantly above this median, while those in the bottom quartile fall well below. However, ROE % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Life Insurance Nepal's current ROE % of 3.98% is 65.8% below the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high ROE % mean?
A high ROE % can signal that a stock is expensive relative to its fundamentals. Return on equity is the ratio of current-period net income to average two-period total equity. View historical data on Life Insurance Nepal and its competitors. For the Insurance industry, the median ROE % is 11.64 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Life Insurance Nepal's current ROE % is 3.98%, which is 39% below median its own 10-year median of 6.48. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Life Insurance Nepal stock overvalued right now?
Based on GuruFocus' analysis, Life Insurance Nepal (XNEP:LICN) is currently considered Modestly Undervalued. The stock's GF Value™ is NPR891.53, compared to a current price of NPR787.90 — trading 11.6% below its estimated fair value. The current ROE % is 3.98%, which is 39% below median its 10-year median of 6.48 and 65.8% below the Insurance industry median of 11.64. Life Insurance Nepal's overall GF Score™ is 82/100 with 4 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is ROE % calculated?
ROE % is calculated from a company's financial statements. For Life Insurance Nepal (XNEP:LICN), the current ROE % is 3.98% as of Apr. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Life Insurance Nepal (XNEP:LICN) Overvalued in 2026?
Based on GuruFocus' analysis, Life Insurance Nepal stock appears to be undervalued.
The current stock price of NPR787.90 is trading 11.6% below its estimated GF Value™ of NPR891.53.
GuruFocus considers Life Insurance Nepal to be Modestly Undervalued.
Key valuation signals for XNEP:LICN:
ROE %: 3.98% (39% below median its 10-year median of 6.48)
GF Value™: NPR891.53 vs. price of NPR787.90 (11.6% below fair value)
Industry Position: 65.8% below the Insurance median (#411 of 501)
No single metric tells the full story. See the XNEP:LICN stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Life Insurance Corp Nepal Ltd is engaged in the life insurance business in Nepal, providing participating and non-participating life insurance products through its provincial offices, branches, sub-branches, and network of agents. Its product portfolio includes endowment plans, child plans, and money-back plans, and it provides services such as reviving lapsed policies, policy loans, nominations, and bonuses to policyholders. Revenue is mainly generated from premiums and investments, including regular and single-premium collections, returns from investments in equities, bonds, and other financial instruments, service-related fees, and commission on reinsurance ceded.
82GF Score
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