New Delhi: The government aims to complete merger of three state-owned general insurance companies – National Insurance Co Ltd, United India Insurance Co Ltd, and Oriental Insurance Co Ltd – by the end of March, Finance Secretary Rajiv Kumar said Wednesday.
Respective boards of the three companies have already given their in-principal approvals for the merger.
“Merger of PSU general insurers is at an advanced stage. We can see that happening quite soon. It is already before the Cabinet,” Kumar said. Though the merger process was in the works, the government would take a call on listing the merged entity after the merger, informed Kumar.
To facilitate the merger, the Budget has announced a capital infusion of Rs 6,950 crore into the three public sector general insurance companies (PSGICs) in the next financial year. This will help achieve requisite minimum solvency ratio by each of the three PSGICs, according to Budget documents.
The government infused Rs 2,500 crore into the three insurers through first supplementary demands for grants for 2019-20 in December.
In his 2018-19 Budget speech, then Finance Minister Arun Jaitley had announced that the three companies would be merged into a single insurance entity. However, the merger process could not be completed due to various reasons, including poor financial health of these companies.
As on March 31, 2019, the three companies together had more than 200 insurance products with a total premium of Rs 41,461 crore and a market share of around 35 per cent. Their combined net worth was Rs 9,243 crore, with total employee strength of around 44,000 spread over 6,000 offices.
PTI