Govt to bolster public sector insurance firms in FY25
₹204.30 crore, while National Insurance Company Ltd made a profit of ₹44.82 crore for the first half of the current fiscal from a loss of ₹1,768.46 crore in the year-ago period. Oriental Insurance Company Ltd slashed its first-half loss to ₹42.17 crore from a net loss of ₹3,586.93 crore during the first half of FY23. However, the New India Assurance Company Ltd reported a loss of ₹199.99 crore for the second quarter of FY24 from a profit of ₹260.23 crore posted during Q2FY23.
Earlier this fiscal, the government had planned to infuse ₹4,000 crore– ₹5,000 crore in state-owned general insurers. But this didn’t materialize, and the government is now likely to recapitalize these companies in the next fiscal. In her Budget 2021 speech, finance minister Nirmala Sitharaman announced strategic divestment plans for two banks and an insurance company.
But the process is yet to move ahead. Though the insurer’s name has not been finalized, government think tank Niti Aayog has recommended privatizing United India Insurance. Privatizing an insurer will be easier for the government now, since Parliament has amended the General Insurance Business Nationalization Act, allowing it to dilute its stake in a general insurer below 51%.
The Centre was earlier working on a proposal to merge public sector insurers. The plan was to merge National Insurance Company, United India Insurance Co. and Oriental India Insurance into a single entity and list it on the exchanges.
The finance ministry is likely to look into the merger and listing proposal and take a decision in FY25, said the person mentioned above. A finance ministry spokesperson didn’t respond to an emailed query. India’s general insurance market comprises 27 companies, including the four
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