In a move, indicating possibilty of a future merger, the four general insurers have decided to appoint a common consultant for which GIPSA – the coordinating body for the PSU general insurers, has called for Request for Proposal (RFP) from eligible entities to restructure operations of these organisations towards profitable growth
The expected duration of the proposed assignment for the selected consultants is 10 months, with a provision for extension, if required on existing terms
Has the government once again changed its plans to privatise one of the PSU general insurers and instead go for a mega merger of its four general insurers into one?
In a move, indicating possibility of a future merger, the four general insurers have decided to appoint a common consultant for which GIPSA – the coordinating body for the PSU general insurers, has called for Request for Proposal (RFP) to restructure these organisations suitably and streamlining their business processes for profitabilty.
“The government wants to create values these companies for any kind of merger or listing . Only NIA is a listed company among the four,” said sources in the ministry of finance(MoF)
The assignment, as mentioned in the RPF, is titled as “Organisational Efficiencies and Performance Management in Public Sector General Insurance Companies.”
As per the 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 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.
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 Boston Consulting Group(BCG) had bagged three of them, NIA,OIC,UII, PwC had got the mandate for NIC.
Deloitte had got GIC Re for restructuring.
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, said the RPF.
The expected duration of the proposed assignment for the selected consultants is 10 months, with a provision for extension, if required on existing terms.
As per the RFP, the scope of work involves organisational restructuring that is irreversible providing for digitally enabled workflows to convert operating offices into customer experience and business development centres while centralising underwriting/claims/accounts and others into the Regional Hubs;
– activate all three key channels for retail business growth namely, Agency, Bancassurance and Alternative channels through suitable sales management, incentives and rewards processes;
– create/shift large corporate businesses (both direct and broker-driven) at select6-8 locations, directly reporting to the Head Office.
– provide capacity planning framework through manpower redistribution for both Business Development (BD) and Non-BD roles, with a clear focus on retail business through pre-underwritten products and simplified processes;
– provide a comprehensive reskilling/up – skilling and capability building framework for BD, Non-BD, large corporate and vertical teams to cope with the above restructuring in a confident and motivated manner;
– handhold the insurers in implementing the new organisation structure across functions and geographies by providing carefully designed and sensitively implemented change management approach and communication framework;
– designing objective and quantifiable KPIs for each unique role along with their measurable outcomes and its integration with the performance appraisal system for each PSGIC to achieve y-o-y milestones;
– based on the above KPIs, creating performance dashboards for each sales and non-sales staff at the operating offices, regional offices and head office as well as across functions linked with the core system.
Interested consultancy firms should submit their proposals to the chief executive, GIPSA, the coordinating body for the project.
In FY 2021-22, the four Insurers together have procured a total premium of Rs.75,116 crore with a market share of around 34 per cent.
The total employees’ strength is around 44,743 spread over 6,759 offices.
Earlier, the government had shelved merger plans of three PSU general insurers-OIC, NIC and UII in July 2020 after pursuing it over two years.
Recently, these three general insurers were provided with Rs 5000 crore capital by the government to improve their solvency rations as they lack basic solvency ratio of 1.5%.
Though, Nirmala Sitharaman, finance minister, had earlier announced, while presenting her Budget in 2021-22, that one of the PSU general insurers would be privatised, nothing has happened.as yet. ,