DFS Secretary denies plans to merge state-owned insurers

Insurance

Department of Financial Services Secretary M. Nagaraju on May 5 denied plans to merge all state-owned insurance companies and said once the policy decision is taken the government will release it.

“No decision has been taken to merge the PSU insurers, when the policy decision is taken, we (government) will come out,” Nagaraju said on the sidelines of the listing ceremony of 1st Residential Mortgage-backed Securities.

Last week, some media reports had said that the government is considering the merger of four state-owned general insurance companies into a single entity. These companies are New India Assurance, National Insurance, Oriental Insurance and United India Insurance.

The move is being discussed with the aim of creating a strong general insurance giant, similar to the Life Insurance Corporation of India (LIC), that can better compete with private players. The merger is also expected to boost the expansion and reach of general insurance services across the country, media report said.

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.