Due to the delays in merging three major state-owned general insurers in India, the firms have suffered huge financial losses and mounting job vacancies.
The three firms set to be merged – National Insurance, United India Insurance and Oriental Insurance – have around 600 to 900 officer posts and around 12,000 rank-and-file positions vacant, the Business Standard reported. Additionally, the finances of the firms have been affected, with the first two having lost significant market share.
National’s market share dipped from 10.78% in December 2017 to 8.63% in December 2018, while United India Insurance’s came down from 11.02% to 9.27% over the same period, the report said.
The three firms have posted high losses in the second quarter of fiscal year 19, due to reduced premium growth. The companies cited multiple reasons accounted for the losses, including manpower shortage and lack of clarity regarding the planned merger.
While the government has not declared any freeze on recruitment, the companies haven’t hired any new employees since February 2018, the report said. This was due to the Finance Ministry telling the companies to hold on any new staffing plans until the merger was completed, an official in one of the companies told the Business Standard. The lack of new hires is concerning because up to a quarter of the employees are expected to retire within the next two to three years.
“We will take up the matter of staff crunch with the government,” a senior executive of National Insurance said.
