Three consultants, Boston Consulting Group(bcg), Ernst & Young(E^Y) and Oliver Wyman, a part of the Marsh & Mclenan Group,are in the final race to bag the deal for preparing strategies facilitating the proposed merger of three state owned general insurers-National Insurance Company(NIC), Oriental Insurance Company(OIC) and United India Insurance (UII).
The core panel consisting of three general managers from the merger candidiates to oversee the merger will be meeting on Nov 28 to select the final name to help the merger of the three companies.
“Initially, there were six to seven consultants which had shown interest to participate in merger exercise but only these three have submitted their biddings for the final scrutiny,’’ said sources in the Ministry of Finance.
MoF has to approve the name after panel picks up the final candidate.
Though the proposed merger of these companies is no way happening soon, the fact that the companies are appointing a consultant soon indicates merger plan is on cards but will be delayed, said the MoF sources.
“I can’t say anything about the time-frame for the merger process to complete. I can only say that a process has started with appointment of a consultant. Definitely post the merger. the largest general insurer will emerge in terms of market share,’’ said Tajinder Mukherjee, CMD, Natioanal Insurance Company
Once it happens, the merged entity will be the largest entity with 31 per cent market share when compared to the 16 per cent market share as being enjoyed by New India Assurance, added Mukherjee.
Among the three. BCG was earlier-way back in 2007-chosen to restructure New India Assurance, OIC and UII.Besides, the consultant had participated in the recent exercise called `Manthan’ held in New Delhi to prepare multipronged strategies to invigorate the functioning of the four PSU general insurers.It had charged Rs 20 crore for each of the assignments from these three companies.
The strategic two-day meet was addressed by the finance minister Arun Jaitley and IRDA chairman SC Khuntia.
The selected consultant is expected to advise on organisational restructuring, rationalisation of human resources, management of operational issues, regulatory and compliance issues, it said.
It is expected to handhold the management of all the three companies, throughout merger process till the new organisation is formed and set in place, it said.
The consultant has to suggest an action plan with broad time lines to bring all the three into a single merged entity, with a new name, logo and a new Head Office.
It will also work out a scheme for rationalization of offices, merger and unification of offices, creation of new organizational structure. The new entity should assimilate all the individual geographical dominance.
The consultant has to design and finalise series of advertisement and public communication campaigns & media management leading to the creation of single entity with least disruption in business, image or brand equities.
Union Finance Minister Arun Jaitley in his FY 2018-19 Budget speech had announced that the three companies would be merged into a single insurance entity .The process of merger is likely to be completed during the current fiscal, he had said.