FinMin Pushes For Public General Insurance Players To Improve Performance, Here's What Financial Secretary Said

Vivek Joshi said that the authorities have consistently monitored the performance of the state-owned general insurance firms and this has resulted in an improvement in the companies

The official noted that the authorities have instructed these entities to prioritise profits and let go of segments such as motor and health insurance, which incur more losses. (Image Source: Pexels)

Source : Pexels

The Finance Ministry called on the state-owned players in the general insurance industry to pay more attention to businesses that are profitable. The ministry urged the public insurance firms to prioritise profitability and not run after the top line.

In a conversation with PTI, Vivek Joshi, Financial Services Secretary, said that the authorities have consistently monitored the performance of the state-owned general insurance firms and this has resulted in an improvement in the companies. Notably, the government recently poured in Rs 7,250 crore in installments in National Insurance Company Limited, Oriental Insurance Company Limited, and United India Insurance Company, all public players in the general insurance sector.

The Secretary remained hopeful that these firms would not need capital infusion again, ‘which is why the Budget has not made any provision. These three general insurance companies have improved their financial performance significantly’. 

Sharing details of the companies’ performances, Joshi said that Oriental Insurance clocked a profit of Rs 18 crore in the 2023-24 fiscal year, against a loss of Rs 5,000 crore reported in the preceding financial year. During the same period, National Insurance Company narrowed its loss to Rs 187 crore from Rs 3,000 crore, while United India Insurance logged a loss of Rs 800 crore in FY24, down from Rs 2,800 crore in FY23.

“New India Assurance has continued to perform well, increasing its profits from Rs 1,000 crore in FY23 to Rs 1,100 crore in FY24. In addition to the shift in focus, the government is also addressing operational issues within these insurers. A lot of employees retired, and there was a ban on hiring new staff. But now they are asked to recruit in a balanced way. We expect them to strengthen further,” Joshi stated.

Earlier, these insurance companies focused on business intake to reflect growth, the secretary noted. Now, he stressed, that the authorities have instructed these entities to prioritise profits and let go of segments such as motor and health insurance, which incur more losses.