Govt keen on privatizing general insurer this year

Success with the initial public offering (IPO) of Life Insurance Corp. of India (LIC) may prompt the government to privatize one of its general insurance companies this year according to sources.

After the listing of LIC, the government will start work to identify one of its three general insurers-National Insurance Co., United India Insurance Co. and Oriental India Insurance-for privatization and begin the work on it after their first-quarter earnings are in.

Federal think tank NITI Aayog is said to have recommended United India Insurance for privatization to a core group of secretaries on disinvestment, the people said, though the name is yet to be finalized.

A group of ministers (GoM) will take the final call on the candidate for privatization.

United India Insurance is not in the best of financial health, reporting a loss of Rs. 1,485 crore in 2019-20; still, the insurer is considered the best candidate for privatization, given its nationwide presence and strong market share in various insurance categories. Its losses dropped to Rs 985 crore in FY21, and is estimated to have further narrowed in FY22.