In order to review the cash-strapped Public Sector (PSU) general insurance companies, the government is contemplating on the infusion of Rs 3000 crore capital in three PSU general insurance companies.
These general insurance companies, namely are, United India Insurance, Oriental Insurance and National Insurance.
Funds Infusion of Rs 3000 crore in three General Insurance PSUs
From the reliable sources, it has been understood that the government is currently waiting for the quarterly results (Q4FY23) of these companies, after which they will decide to infuse Rs 3000 crore in three PSU general insurance companies.
Previously there was lot said about the privatisation of one PSU general insurance company, however it has also been learnt that the same been put on hold as we speak.
The solvency ratio for these general insurance companies is below the regulatory requirement of 1.5, which makes their situation quite precarious and hence these companies are in dire need of funds.
Speaking of the exact number, then the solvency ratio as 2022 of National Insurance stands at 0.63%, that of Oriental Insurance is 0.15% and in the case of United India Insurance, it is 0.51 %.
Privatisation & Merger But on Hold Amid Growth Plans & Organizational Reforms
Other than this, the plan of privatisation of one general insurance company has been put on hold even as the companies have been asked to focus on growth. The said company has taken up several organisational reforms, including performance-based incentives within the organisation. Focus on digitization and cost-saving are also among other initiatives of the companies.
Even the merge of the PSU general insurance companies, as per the sources, has taken a back seat. For more details, we shall have to wait till the announcement of Q4 results by the PSUs.
