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Three state-owned general insurers in India are likely to complete their merger by next year, according to an official of one of the firms.
National Insurance Company (NIC), United India Insurance, and Oriental Insurance Company are set to meet to discuss the merger road map, according to M N Sarma, chief managing director of United India Insurance.
“We hope to have some roadmap on [the] merger and [the] health insurance scheme in the meeting … We expect the merger to be completed before the next vote on accounts,” Sarma was quoted as saying by the Hindu Business Line
According to Sarma, the merged general insurer will have an operational advantage through better handling of risks, as well as helping rationalise costs. The merger would result in the largest general insurer in India, with a market share of 30%.
Mounting losses in underwriting and more expensive claims in recent years have put pressure on the profitability of many Indian general insurers, including a host of state-owned ones.
Finance Minister Arun Jaitley had earlier announced in his budget speech a plan to merge the three general insurers into a single entity. The resulting entity would then become publicly listed, Jaitley said.
