The finance ministry has requested public sector basic insurance coverage companies, particularly Nationwide Insurance coverage, Oriental Insurance coverage and United India Insurance coverage, to rationalise branches and reduce down avoidable bills to enhance their monetary well being, sources stated.
Earlier this yr, the Union Cupboard determined to halt the merger strategy of three state-owned basic insurance coverage companies on account of weak monetary positions of those three companies. As a substitute, the federal government authorised fund infusion of Rs 12,450 crore to satisfy regulatory parameters.
In addition to, sources stated, they’ve been requested to develop their enterprise by way of digital medium.
As a part of capital infusion train, the federal government additionally authorised elevating authorised share capital of Nationwide Insurance coverage Firm Ltd (NICL) to Rs 7,500 crore and that of United India Insurance coverage Firm Ltd (UIICL) and Oriental Insurance coverage Firm Ltd (OICL) to Rs 5,000 crore every.
The Rs 12,450 crore capital infusion authorised by the Cupboard in July consists of Rs 2,500 crore supplied to those corporations throughout 2019-20. Throughout this yr, the federal government infused Rs 3,475 crore whereas asserting infusion of the stability Rs 6,475 crore in a number of tranches.
The federal government in Finances 2020-21 had made a provision of Rs 6,950 crore for capital infusion in these three insurance coverage corporations so as to keep the requisite minimal solvency ratio.
Three PSU basic insurers, with their massive underwriting losses of Rs 14,443 crore, collectively have been accountable for the general losses of over Rs 7,118 crore in 2019-20.
NICL, with a mixed ratio of 160.8 per cent and underwriting losses of Rs 5,759 crore, has suffered losses of Rs 4,108 crore whereas OICL (141 per cent, Rs 4,197 crore) and UIIL (132 per cent, Rs 4,487 crore) have been hit with losses of Rs 1,524 crore and Rs 1,486 crore, respectively in 2019-20.
Nevertheless, New India Assurance, the one exception out of the 4 public sector basic insurers, posted a revenue of Rs 1,418 crore in 2019-20.
(Solely the headline and movie of this report could have been reworked by the Enterprise Customary employees; the remainder of the content material is auto-generated from a syndicated feed.)