Three PSU General Insurance Companies Seek Rs. 12,000 Crore Capital Infusion
Published On 12 Dec 2019 By Sakshi Aggarwal
The three PSU general insurers viz., United Insurance, National Insurance, and Oriental Insurance, seek a capital infusion of Rs. 12,000 Crore from Centre to save themselves from sinking and manage the business. This has been referred to as a precondition before the beginning of the merger process.
As per a senior official, “Capital is the immediate need of the business. We can have the merger only once the entities have a healthy balance sheet.”
The proposal will probably be considered in
The capital will first be used to improve the solvency or minimum capital of the three insurance companies. By June end, United India’s solvency was 140
This shows that the insurer is suffering from underwriting losses, i.e.
The Director of one of these PSU
The merger process
This merger was a pet project of BJP government and was announced by the former Finance Minister Arun Jaitley during
The idea was to bring the merging entity on stock exchanges. It was to create a stronger insurance company that is able to sustain in
The two PSU general insurers namely New India Assurance and General Insurance Corporation of India have a presence on the exchanges. It is estimated that this will be the largest non-life Indian insurer worth around Rs. 1.5 Lakh Crore.
But considering a few challenges like human resource concerns,