PSU insurers told to shape up

economictimes.indiatimes.com:

public sector banks. At a review of the performance of state-owned insurers, the general insurers were conveyed that capital infusion will not be provided to them just to cut losses and they need to draw up strategies to work on their revival, officials told ET. «Insurers need to have a relook at their portfolio and work out future strategies,» said one government official.

State-run general insurers continue to lose market share to private sector players, and the government wants companies to make changes to their business strategies to arrest the decline. In FY23, the four public sector general insurers-United India Insurance, New India Assurance, Oriental Insurance and National Insurance Company-reported a cumulative market share of 32.27%, down from 34.03% in FY22. The government is keen that insurers take a leaf out of the public sector lender's play book, the second official aware of development said.

During 2022-23, public sector banks earned a record aggregate net profit of around ₹1.05 lakh crore, almost triple the net profit earned in 2013-14. The asset quality of PSBs also improved significantly with gross NPAs at 4.97% and net NPAs at 1.24% in March 2023. «General insurers can make a turnaround like state-run banks, as insurance penetration in India is low and offers great growth potential,» said the official.

The government had infused ₹5,000 crore into three state-run general insurers in FY21. National Insurance Company had received ₹3,700 crore, Oriental Insurance ₹1,200 crore and United India Insurance ₹100 crore. But a subsequent wage revision impacted their balance sheet.