SN Rajeswari,57,general manager,New India Assurance(NIA),has been selected by the Banks Board Bureau (BBB), as the CMD of the Delhi based Oriental Insurance Company(OIC).
AV Girija Kumar,CMD,OIC,is retiring this month end on reaching 60.
BBB had conducted virtual interviews of five senior general managers of the public sector general insurance industry,on Tuesday, with two years of residual services untill May 2022,to select a CMD of OIC.
For the first time, the interviews for selecting a CMD have to be done through video conferencing as the country is under lockdown till May 31 to check the spread of Covid-19 Pandemic.
Rajeswari,a qualified charted accountant,is currently the second senior most GM of the public sector general insurance industry and would be retiring in May 2022. She had started her career as an insurer with the Chennai base United India Insurance(UII) and was later shifted to NIA as a deputy general manager(DGM).
Currently, B P Sharma, former secretary of Department of Personnel and Training (DoPT), heads a seven-member panel for selecting CMDs of public sector insurance companies and CEOs of PSU banks.In a unique practice, BBB has preferred, this is the second time, to announce the result of the Tuesday interview for selecting the CMD of OIC on the same day.Earlier, for the first time,results of interviews,in Sept 2019, for selecting CMDs of GIC Re and Agriculture Insurance Company(AIC) were announced on the same day.
On the basis of the recommendation of BBB,the ministry of finance(MoF) will now begin the formal process to appoint Rajeswari as the CMD of OIC. After the approval of the union finance minister Nirmala Sitharaman,the official papers would be sent to ACC(appointment Committee of Cabinet) and Prime minister's office(PMO) for their approvals.
“Going by the earlier experience,the whole process may take around two months to notify the name of Rajeswari as CMD of OIC,'' said sources at MoF.
The other general mangers who had appeared for the interview are- Dinesh Waghela(OIC), Sobha Reddy, National Insurance Company(NIC),Deepak Godbole,GIC Re, Madhulika Bhaskar,GIC Re.
Rajeswari in an interview with Asia Insurance Post earlier had said the penetration of nonlife industry in India has now reached only 0.9% from 0.6% and this under penetration level and increasing awareness on insurance among the people will lead to the growth of the Industry.
“Retail health, motor and personal lines of insurance will drive the growth of the Industry.As disposable income increases retail segment (like Motor and Health) is expected to grow. Increased investments will mean more asset creation which will require insurance and hence prove to be growth driver of property lines,'' she had explaned.
According to Rajeswari, the general insurance industry has played an important role in government initiatives like crop insurance, health insurance etc. and will continue to do so.
“Though the nonlife sector is recording a double digit growth, there has not been much profit generated so far for various reasons. The Industry had been focusing on growth but over a period of time profitability is also expected to improve,'' she had said.
However, analysts point out many challenges Rajeswari has to face as the CMD of OIC which is currently waiting for merger( a three way merger among National Insurance Company, OIC and UII is on the drawing board for the last two years)) or large government financial support to survive. The company currently doesn't have a minimum solvency ratio of 1.5 per cent and is operating on regulatory forbearance allowed by the regulator IRDAI. The centre as part of special financial package, had infused Rs 50 crore into OIC two months back and 2020-21 Budget has provided for another over Rs 6,000 crore for the three PSU general insurers-OIC, NIC and UII.
With the move to appint a new CMD at OIC,there are now clear indications that the government is not in a hurry to implement the 2-year old merger proposal among the three PSU general insurers,said analysts.
Meanwhile,the MoF has indicated that it would start the official exercises to appoint directors at PSU general insurance companies.
“Though, there is a mumur that the ministry will start the process to appoint directors ,nothing has happened as yet,'' said a CMD of a PSU general insurance company.
It had completely stopped appointing directors in the four PSU general insurance companies for almost two years and as a result majority posts of directors– out of eight -are currently lying vacant in the four PSU general insurers.
MoF wanted to revamp the ways the whole exercise to appoint the directors in these companies were conducted.
Instead of existing system of automatic appointment of the senior most general manager as the director of a company, the MoF wanted to follow the same system that is pursued for the selection of a CMD.
But, nothing had happened so far leading to the disappointment of senior officials who are missing opportunities to become directors of a company.