Finance Ministry to review performance of PSU insurers

The finance ministry will be holding a performance review meeting of PSU insurance companies, including the LIC.

The exercise will also set the pace for consolidation, said a finance ministry official, adding that all the three insurers have already been directed to align their operations.

The underwriting losses of PSU general insurance firms increased 43.89% to Rs. 15,591 crore in 2016-17, from Rs. 10,835 crore in the previous year.

“We are hopeful that the firms will improve their performance, and we will be able to merge these companies in the next six months and after that we will look at listing,” he said.

“This will also be an opportunity for these three firms to sit together and undertake a preparatory exercise for reorganization of offices and manpower,” said the above quoted finance ministry official, adding that it has been observed that traditionally there has been a high concentration of offices in certain areas in metro and other big cities. The government wants the general insurers to contain the under- writing losses.

“We are evaluating all options as to how the combined entity can be strengthened given the losses of PSU firms have not come down significantly,” said the finance ministry official.