The Confederation of Officers’ Associations, representing majority of the officers of four public sector general insurance companies(PSGIC), New India Assurance,Oriental Insurance Company,National Insurance Compamny,and United India Insurance, have urged Union finance minister Nirmala Sitharaman to allow the merger of three state owned general insurers UII, NIC and OIC, to go through..

Earlier,the government had announced the scrapping of the two-year old proposal to merge the three PSU general insurers without giving any specific reasons for it..   

While the workforce have welcomed the announcement of the government for its decision to infuse additional capital in these PSGI Companies, which has contributed to the exchequer for over four decades, the ‘shelving’ the merger process has not gone down very well,'' said the Confederation, in a letter to Sitharaman on Monday.

“In the larger interest of the PSGI companies, the demand for merger of the companies had been in focus,particularly to cut down the inter-company unhealthy competition and for enhancing the retention capacity of the public sector organisation, We are of the firm and considered opinion that the avowed objective of profitable growth and improved solvency ratio of these PSGI Companies could better be achieved by going ahead with the proposed merger,'' said the letter., 

Also talks of “privatisation” of these 3 PSGI Companies is not only disturbing but has an effect of further demoralising the workforce of these premier institutions, adde the letter..

The proposed mega company, would have faced the the challenges posed by the private Companies, who are indulging in unhealthy trade practices.The competitors – particularly from the private sector, had launched vilified campaign of ‘possible short-comings’ in the services rendered by these PSGI companies on account of proposed merger so as to en-cash the situation for expanding their market. But with the sustained efforts of the workforce of these PSGI Companies, the fears and misconceptions of the clients could be allayed to a greater extent, thereby, the client/business base remained intact, over the past two years, despite the fact of uncertainty that prevailed at the macro level, said the confederation..

The confederation has further pointed out that there is substantial reduction happening in the workforce on account of retirements, with no addition to the workforce through fresh recruitments. The number of exits happening on account of regular retirements, with particular reference to these three companies, gives a figure of around 8000 over a period of three years (2019, 2020 and 2021) across all cadres, which is a matter of great concern. That apart, sizeable number of Officers/staff are leaving voluntarily which has put the operating offices of these Organisations in a state of acute shortage of manpower.

The solvency margin of these PSGI Companies have taken a hit in the recent past, on account of new stipulations for liability provisioning, including additional burden for Motor TP claims and other changes brought about by the regulator in valuations of assets, etc coupled with the challenge of facing unhealthy competition, in a sector where no level- playing is made available as against the private players,said the Conferation. .