Though, the government had not announced any specific plans for the mergers among PSU general insurers-New India Assurance, Oriental Insurance, United India Insurance, United India Insurance- in recent times, the Department of Financial Services(DFS) was undertaking some kind due diligence internally on possible merger plans among these companies.
`Yes, the DFS has stopped all its due diligence now on mergers. It is not happening,’’ said CMDs of two PSU general insurance companies, who don’t want to be named .
New Delhi: The government seems to be not in favour of effecting any merger among PSU general insurance companies now and have dropped all its plans for the merger after reviving it sometime back.
Though, the government had not announced any specific plans for the mergers among PSU general insurers-New India Assurance, Oriental Insurance, United India Insurance, United India Insurance- in recent times, the Department of Financial Services(DFS) was undertaking some kind due diligence internally on possible merger plans among these companies.
“Yes, the DFS has stopped all its due diligence now on mergers. It is not happening,’’ said CMDs of two PSU general insurance companies, who don’t want to be named .
However, it is not clear whether merger plans among the PSU general insurers have been permanently shelved or for the time being.
Recently, M Nagaraju, secretary, DFS, had said the government had to do its home work first before deciding about any such merger plans in the PSU general insurance industry.
Beginning its home work on the issue of merger of three PSU general insurance companies, OIC, NIC, and UII), the DFS had for the first time had set up a merger cell for developing a comprehensive plan after undertaking due diligence of all knotty issues for its smooth implementation.
These companies, which have been growing their topline, despite facing issues like solvency and net worth deficit for the last couple of years, are waiting for large capital infusion from the government for sometime.
“We are in dialogue with government on our requirement of capital but haven’t got any commitment,’’ said CMD of a PSU general insurer.
After Delhi based OIC reached Rs 20,000 crore premium in FY 26, the government had reiterated its continued support to public sector insurance companies in their efforts to expand outreach, adopt innovative practices, and strengthen service delivery for the benefit of the nation.
“The` Department of Financial Services applauds the efforts made by the employees of OIC for their commitment to operational excellence and customer service.The development signifies growing trust of policyholders, intermediaries, and stakeholders in OICL in particular and public sector insurance institutions as a whole. The achievement aligns with the broader objective of the Government to promote financial inclusion (Insurance for All by 2047) and ensure wider access to risk protection mechanisms,” said a government statement.