<p>The Centre will infuse Rs 2,500-crore into three public sector general insurance companies -- Oriental Insurance, National Insurance and United India Insurance – to improve their financial health.</p>.<p>The decision was taken in a meeting of the union cabinet chaired by Prime Minister Narendra Modi.</p>.<p>The money will be given to them immediately to prepare them for a merger by March this year. The approval from parliament for such an infusion has already been taken through the supplementary demands for the grant earlier this year.</p>.<p>The ultimate aim of the government is to merge the three insurers and create a non-life insurance behemoth of the size of LIC and thereafter, list that on bourses.</p>.<p>The operational efficiency and solvency ratio of the three entities is expected to increase after the merger.</p>.<p>The profitability of these companies is also expected to improve, an official said after the cabinet approved the merger.</p>.<p>“The government is infusing capital into these (insurance) companies so that the solvency ratio becomes acceptable and it fulfils the criteria of IRDA (Insurance Regulatory Development Authority),” cabinet minister Prakash Javadekar said.</p>.<p><br />The action on merger comes two years after late finance minister Arun Jaitley had cleared such a proposal in 2018-19 budget and also expressed the desire to list them.</p>.<p>Last month, the non-life insurer National Insurance Company Ltd has approved its merger with Oriental Insurance Company Ltd and United India Insurance Company Ltd.</p>.<p>The trade unions have been seeking the merger of four PSU general insurance companies, including the New India Assurance Co.</p>.<p>Though the government is moving swiftly on mergers, its disinvestment programme has run into rough weather after the Chine-born coronavirus impacted the world’s two major financial centres – Hong Kong and Singapore – where several roadshows of disinvestment were planned in the next few months.</p>.<p>The government needs to garner around Rs 40,000 crore through its disinvestment proceeds after it cut the target steeply to Rs 65,000 crore this year from an earlier Rs 1.05 lakh crore.</p>.<p>Air India, BPCL, CONCOR and Shipping Corporation are some big-ticket divestments that are lined up for this year, although the proceeds may come to the coffers next year.</p>
<p>The Centre will infuse Rs 2,500-crore into three public sector general insurance companies -- Oriental Insurance, National Insurance and United India Insurance – to improve their financial health.</p>.<p>The decision was taken in a meeting of the union cabinet chaired by Prime Minister Narendra Modi.</p>.<p>The money will be given to them immediately to prepare them for a merger by March this year. The approval from parliament for such an infusion has already been taken through the supplementary demands for the grant earlier this year.</p>.<p>The ultimate aim of the government is to merge the three insurers and create a non-life insurance behemoth of the size of LIC and thereafter, list that on bourses.</p>.<p>The operational efficiency and solvency ratio of the three entities is expected to increase after the merger.</p>.<p>The profitability of these companies is also expected to improve, an official said after the cabinet approved the merger.</p>.<p>“The government is infusing capital into these (insurance) companies so that the solvency ratio becomes acceptable and it fulfils the criteria of IRDA (Insurance Regulatory Development Authority),” cabinet minister Prakash Javadekar said.</p>.<p><br />The action on merger comes two years after late finance minister Arun Jaitley had cleared such a proposal in 2018-19 budget and also expressed the desire to list them.</p>.<p>Last month, the non-life insurer National Insurance Company Ltd has approved its merger with Oriental Insurance Company Ltd and United India Insurance Company Ltd.</p>.<p>The trade unions have been seeking the merger of four PSU general insurance companies, including the New India Assurance Co.</p>.<p>Though the government is moving swiftly on mergers, its disinvestment programme has run into rough weather after the Chine-born coronavirus impacted the world’s two major financial centres – Hong Kong and Singapore – where several roadshows of disinvestment were planned in the next few months.</p>.<p>The government needs to garner around Rs 40,000 crore through its disinvestment proceeds after it cut the target steeply to Rs 65,000 crore this year from an earlier Rs 1.05 lakh crore.</p>.<p>Air India, BPCL, CONCOR and Shipping Corporation are some big-ticket divestments that are lined up for this year, although the proceeds may come to the coffers next year.</p>
