E&Y has beaten three other international consultants, Boston Consulting Group,(BCG), KPMG and AT Kearney to bag this prestigious project
As per the new RPF, all the four companies are calling for only one consultant to lay down uniform process in terms of human resource policies and IT system
New Delhi:
Moving swiftly, GIPSA, the official coordinating body for the four public sector general insurance companies, has selected Ernst & Young(E&Y) as a consultant for restructuring these companies suitably and streamlining their business processes for profitabilty.
With a title“Organisational Efficiencies and Performance Management in Public Sector General Insurance Companies.” GIPSA had floated a request for proposal (RFP) from consultants in early May for overhauling New India Assurance(NIA), the largest general insurer in the country, Oriental Insurance(OIC), United India Insurance(UII) and National Insurance Company(NIC)..
E&Y has beaten three other international consultants, Boston Consulting Group,(BCG), KPMG and AT Kearney to bag this prestigious Rs 10 crore project which has to be completed in 10 months.
E&Y, was selected after both technical and financial due diligence by the GIPSA.
E&Y is not new to the functioning of PSU general insurers as earlier it was selected for working out a merger plan for three loss making PSU general insurers, OIC,UII and NIC, at a cost of Rs 60 crore, but was abandoned by the government after pursuing the plans for two years.
As per the new RPF, all the four companies are calling for only one consultant to lay down uniform process in terms of human resource policies and IT system.
“Broadly, 80 per cent of the proposed assignment shall be allocated towards creating unified/common strategies/methodology and frameworks while 20 per cent of the proposed assignment will be allocated towards customising and rolling them out at individual company level,” the RFP had said.
While the majority of the work is centered around a common approach for all the four Insurers, the implementation shall happen at individual company level, it added.
The four companies need a consultant who could quickly absorb itself into this journey of ongoing reforms and permeate them into each and every branch and staff by designing, handholding and successfully implementing the process of such transition through organisational restructuring, performance management and its real-time measurement, allocation of specific roles and responsibilities as well as performance indicators for sales, non-sales and support staff, capacity and capability building and carefully crafted change management approach, the RPF had outlined.
Industry observers point out that the fact that government is now keen to bring about an uniformity among four companies, in the ways they do business along with the organisational structure, show that it may be planning for a mega merger of its four general insurers into one in the future.
Finance minister Nirmala Sitharaman has already announced that one of the PSU general insurers will be privatized though neither the name of the company nor any specific action plan has been put in place by the government as yet.
Years back, these four PSU general insurers along with GIC Re had undertaken similar exercises but each of them had appointed a consultant to itself.
While BCG had bagged three of them, NIA,OIC,UII, PwC had got the mandate for NIC. Deloitte had got GIC Re for restructuring.
Together, with a total premium of R 75,000 crore, these four general insurers have market share of 34.15 per cent.
Indian general insurance industry has a total premium base of over Rs 2,20 trillion in FY2021-22.
Except, NIA , rest of the three companies have lost market shares and ranking in the industry.
Till December 20221,except NIA that had posted a profit of Rs 707 crore, rest of the three had losses over Rs 4000 crore.
Together, four companies have employees of over 44,000 and 7000 offices all over the country.
In all way best solution to merger all 4 PSU non life insurance companies
Mega merger of 4 PSUs is only way to sustain, also blessings for the Indian economy.
First, the Wage revision for period between 01.07.2017 and 31.07.2022. After that any other questions
Four companies not Continuing the Business Centre system due to lack/shortage employees. In my experience each business centre achieved Rs 1 crore easily with profit. Due to transfer of incharges with promotion to other places, they were opt for VRS and/or retirement. If you give the chances to that employees in contract basis. Please consider sirs
Velmurugan Chandrasekaran
VRS – Oriental Insurance Co.,
Madurai, Tamilnadu, India
9944778874
It seems to be a vague exercise saddling PSU general insurance companies with Rs 10 crores. Earlier also BCG n PwC were engaged. The intentions of the management and honest application of resources what are actually needed. If we do not know the weakness and strength of our own house, then all CMD’s and COOs should be removed and the companies should be out sourced. It’s the oldest demand that there should be a single monolithic organization on the lines of LIC, but due to vested interests the top management has yet not done it nor they have gone through the suggestions given by the associations.
All companies can b merged in single identy as GIslC of india like lIC of india
Loose ends in regulation to be tightened to stop passing additional benefits to various business generation units. Let the competition purely based on service. This will help a healthy atmosphere in insurance industry in long run.
After allowing private insurance company in general insurance market, there are now more than 25 private general insurers doing general and health business. Before privatisation government was told to give better service and competition is the only way to so. Before 1972 a lot private insurance companies were merged to create 4 public sector general insurance companies by GIBNA 1972. After allowing private insurance companies in 1999 amendment, trade union- All India Insurance Employees Association has been insisting on merger of 4 PSG insurance companies. Now the need of the hour is to merge 4 PSG Insurance companies to give better service and implementing government schemes.
Those who are appointed as CEOs of these PSU general insurers, they are not bothered or really interested in development of these organisations, because they neither know the expectations of market nor IRDA Chairman’s .They are working for Money only. So it would be better to fund out an appropriate personality with vast experience for these PSU general insurance companies
All public sector general insurance companies (PSGIC) can be merged into a single identity like LIC. The most important work of the existing employees to creat an atmosphere all over India that the PSGIC can also give prompt and efficient services every time.
It is all tall and talk with no real HR Reforms possible for
implementation
Issues are way too complex for any private sector consultant with no knowledge of ground situation.
This will be another futile exercise because ultimately the leadership to implement the recommended measures matters. The per person productivity in 3 companies is at its lowest because of lack of accountability. Besides, there is incalculable talent deficit at operational level of these companies. Persons who lack vision, commercial wisdom and are devoid of leadership qualities are in charge of branches and divisions.
Why attempts are being made to hoodwink the government is beyond comprehension. The CMD of a company dare not take action against any incompetent officials for fear of reprisals. The recommendations of consultant will go to the dustbin.
Waste of tax payers money… There is no stringent accountability measures for non performance in PSU General Insurance Companies that is the root cause for the continuous huge losses…. Just appoint senior IAS officer as CMD for minimum two years for these loss making companies to make them to turn around by tonning up of administration and implementing strict accountability measures for non- performance.
You are on the dot. Have put it in a nutshell. Needs no further explanation or elaboration.
Well said brother. The change at the grassroot level is required to save these PSU general companies. Merger of all four are imminent. After entries of private players after opening of the sector, psu are now not required to compete each other.
Merger will solve the shortage of staffs.
There is an urgent need to introduce a SVRS to cut short the existing workforce of old guard who have completed 30+ years of service and climbed up to ladder by the virtue of service without any quality responsibility or commitment towards the growth of their company
After opening up of the Industry to Private players what is needed for FOUR Government Companies:. The object of competition among the Government Companies is gone. So the need of the hour is to merge the 4 Goverment Companies.
Expertise available in plenty-
Those who exited under SVRS 2003 & 2004 were cream of the experts and with more than 3 decades of experience are still available to act as consultants to these companies..
This talent can be reinducted instead of recruiting fresh raw candidates and train them so that they become competent enough to put forth tough fight against the private insurers’ 2 decades experienced marketing forces.
It is a valuable point to ponder in revamping PSU insurers.