Cabinet may approve merger of 3 state-owned general insurers
Cabinet will also discuss capital infusion into the insurers.Merger is expected to improve their operational efficiency, solvency ratioUpdated: Feb 12, 2020 13:16 IST
New Delhi: The Union Cabinet is likely to approve the merger of three state-owned general insurers -- Oriental Insurance Company, National Insurance Company and United India Insurance Company --on Wednesday, a government official in the know of the matter told Mint.
"The Cabinet will discuss merger of the three insurers, as well as capital infusion into them," the official said.
The merger of the three entities is expected to improve their operational efficiency, solvency ratio and profitability.
In 2018-19, former finance minister Arun Jaitley had proposed a merger of the three insurance companies, and listing of the single entity on domestic bourses.
"Three public sector general insurance companies National Insurance Company Ltd., United India Assurance Company Limited and Oriental India Insurance Company Limited will be merged into a single insurance entity and will be subsequently listed," Jaitley had said in his Budget speech.
However, there has been a delay in the merger process as finances of these companies are not strong.
The idea is to make these companies stronger, before they are listed, the official said, adding "The final call will be taken by the Cabinet."
The Centre has already infused ₹2,500 crore into the three state-owned insurance companies via supplementary demands for grant earlier this year. Besides, ₹6,950 crore will be infused in these three companies next year, according to the budget document.