A section of insurance employees have demanded that four PSU general insurers—National Insurance, Oriental Insurance, New India Assurance and United India Insurance should be merged into one to bring down costs.
The President of All India Insurance Employees Association, the largest body of insurance employees, Amanullah Khan said that unhealthy competition among the four PSUs would prove detrimental to the interest of the public sector institutions.
“The government should take a call and initiate immediate steps for merger of the four PSU general insurance companies into a single corporation akin to LIC,” Khan said. The four companies together collected a premium of Rs 30,560.74 crore in the financial year 2011-12, an increase of Rs 5,408.49 crore over the previous year, registering a combined growth of 21.50 percent.
These four PSUs posted a combined gross profit of Rs 1334.19 crore for the financial year 2011-12 as against a loss of Rs 24.73 crore in the previous year. The public sector general insurance industry has retained the market dominance with a share of 58.46 percent, he said. The association also opposed the proposed move of the government to disinvest public sector general insurance companies.
He said that PSU insurers were financially very sound and they have a large asset base and reserves. They are capable of meeting the capital needs through internal resources as and when required.