Centre unlikely to merge 3 general insurers, may privatise one in FY26: Report

Insurance

The government may put on hold its plan to merge three general insurers and instead pick one of them for privatisation this financial year, Livemint has reported.

The other two may be provided additional capital to strengthen their balance sheets, the report cited sources as saying.

“The aim is to strengthen the general insurers’ balance sheets through recapitalisation before any potential merger is considered,” the report quoted a source as saying.

For starters, the Centre will assess the financial performance of all the three in the coming quarters.

National Insurance, United India Insurance and Oriental India Insurance are considered weak and market leader New India Assurance comes out as strong candidate, hence not considered for privatisation, the report said.

Moneycontrol couldn't verify the report independently.

The proposal of an insurance merger was floated in the FY18 Budget and it is learnt that the plan may now be revived. Government’s think tank NITI Aayog recommended United India Insurance for privatisation to a secretaries’ panel in FY22 but it is yet to take off.

The government has been looking to improve Oriental Insurance, National Insurance, and United India Insurance through capital support and business recovery initiatives.

The report said capital infusion may be done to strengthen the three general insurers further and after assessing the performance of the companies, a call on privatisation will be taken.

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