Something that will cheer the employees is that all their arrears since August, 2022, when the salary revision is due, will be credited to all eligible employees in October 2025
New Delhi: The government has managed to prevail upon the 35k workforce of PSU general insurance industry with its latest 14 per cent wage hike offer.
Though, the unions of the industry had hoped for a 17 per cent wage hike, to be on par with Life Insurance Corporation(LIC) and PSU banking industry, the government is set to finalise and notify the new wage hike soon, a senior official of a PSU general insurance company said.
But something that will cheer the employees is that all their arrears since Aug, 2022, when the salary revision is due, will be credited to all eligible employees in October 2025.
The details of the wage revision will be out soon, said the official.
However, 14 per cent wage hike is an improvement over 12 per cent, which the government had approved in the last wage negotiation in Oct 2023.
All the six PSU general insurance companies, New India Assurance, Oriental Insurance Company, Natioanl Insurance Company and United Insurance Company, GIC Re, Agriculture Insurance Company(AIC) had spent Rs 8000 crore in implementing the new wage revision for 44k employees implemented since Aug 2022 .
The disbursement of revised salaries for the employees are unlikely to burden the companies like last time as they have been providing for it in every quarter for last two years.
That too overall size of the employees in the PSU general insurance sector have shrunk a great deal over the last years as employees have retired and replacements are not taking place as a matter of policy.
The unions have justified their demand arguing that they deserve a dignified deal on par with other PSU companies in the financial sector services sector and also the PSU general insurers are now performing well in all parameters with higher profitability.
The PSU general insurance companies had achieved financial turnaround in Q3 FY 25, posting a combined profit of Rs 1,066 crore on the back of various reforms by the finance ministry.
Some of the PSU general insurance companies that historically reported losses, witnessed a major turnaround with all of them becoming profitable again in Q3FY25, the finance ministry had said in a statement.
Further, the DFS officials have maintained that the merger of four companies can be a good idea, but a lot home work need to be done before decision is taken on the issue.
GIC Re , which leads the pack with the largest profit, has demanded a separate deal for its 500 employees on the basis of its nature of its business and profitability.
GIC Re has argued that it needs a much higher pay package to retain its employees who face poaching threat from other reinsurers and all its employees are located in Mumbai where cost of living is much higher.