Public sector general insurers to get capital infusion
Public sector general insurers – An external consultant will be hired to increase operational efficiencies and solvency margin.
According to reports, the government may inject an extra 3,000-5,000 crore in the three public sector general insurance companies based on their performance and requirements over the year. The capital injection will help the general insurance firms National Insurance Company Limited, Oriental Insurance Company Limited, and United India Insurance Company enhance their financial health.
According to reports, the weak general insurance businesses received fund support last fiscal year, but more is needed to get them back on track to profitability. Sources stated that a capital infusion of 3,000-5,000 crore could be disbursed dependent on their performance, and that the government has already increased their allowed capital to account for future money infusions.
Solicitation of proposals
The three public sector general insurers are short on solvency buffer, and an external expert will be hired soon to improve operational efficiencies. Four public sector enterprises have filed a request for proposal (RFP) to reorganize insurers and achieve profitability and employee development through the General Insurers’ Public Sector Association of India (GIPSA).
“Through performance management and capability management, there is a proposal for restructuring the organisation to bring in profitable growth and employee development, in alignment with the Key performance indicators (KPIs) devised by the Public Sector General Insurance Companies (PSGICs),” the RFP stated.
Public sector general insurers
The deadline for proposal submissions is June 2, 2022. Only the New India Assurance Company is publicly traded; the other three are completely owned by the government.
In the Budget 2021-22, Finance Minister Nirmala Sitharaman unveiled a big-ticket privatization strategy that comprised two public sector banks and one general insurance firm. “In the years 2021-22, we propose privatizing two public sector banks and one general insurance firm. This would necessitate legislative changes “she stated at the time
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