The government has confirmed that there are no plans to merge the four public sector general insurance companies.
Despite earlier media reports suggesting such a move, M Nagaraju, Secretary of the Department of Financial Services, denied any plans for a merger.
He stated that the government will announce any policy decision once it’s made.
This clarification was provided during the listing of the First Residential Mortgage-Backed Securities.
Earlier reports had claimed that the government was considering merging the four public insurance companies:
New India Assurance, National Insurance, Oriental Insurance, and United India Insurance, to create a stronger player to compete with private insurance firms.
Why Was There Talk of a Merger?
While the government has denied any such plan, media reports suggested that the merger of these four companies was being considered to build a larger, more competitive general insurance company.
The goal would be to improve the ability of these companies to compete with private insurers and expand the reach of insurance services across the country.
The Merger Proposal Has Been in Discussion for Years
The idea to merge these insurance companies was first proposed in the FY18 budget. There is now speculation that this idea might be revisited.
In FY22, the government think tank Niti Aayog recommended the privatization of United India Insurance, but there has been no progress on this front.
