Finance minister Nirmala Sitharman chaired a review meeting of six Public Sector General Insurance Companies (PSGICs) in New Delhi today
The importance of robust underwriting practices and portfolio optimisation was also highlighted by the FM with instructions to align combined ratios with global industry benchmarks to safeguard profitability and financial stability
New Delhi: Nirmala Sitharaman, Union Minister for Finance and Corporate Affairs, has asked for a swift digital transformation across all Public Sector General Insurance Companies (PSGICs) to their improve service delivery and efficiency by adopting AI-driven claim settlement systems, particularly for Motor Own Damage and Health insurance products and to ensure faster and more accurate claim resolution.
Sitharman chaired a review meeting of Public Sector General Insurance Companies (PSGICs) in New Delhi today and directed the companies to develop innovative insurance products tailored to new and emerging risks, including cyber fraud, and to diversify their product portfolio in line with evolving consumer needs.
The importance of robust underwriting practices and portfolio optimisation was also highlighted by the FM with instructions to align combined ratios with global industry benchmarks to safeguard profitability and financial stability.
The meeting was attended by Secretary, Department of Financial Services (DFS), M. Nagaraju, and CMDs of all PSGICs—New India Assurance(NIA), United India Insurance(UII), Oriental Insurance(OIC), and National Insurance(NIC), GIC Re, Agriculture Insurance Company of India(AIC), along with other senior officials of the Ministry of Finance.
Identifying customer-centricity as a core focus area, the SItharaman directed PSGICs to promptly address customer grievances, strengthen social media engagement, and ensure seamless integration with the Account Aggregator system, including end-to-end digital Know Your Customer (KYC) processes.
These measures are designed to simplify onboarding and improve the customer experience.
To expand market reach and strengthen service accessibility, PSGICs were encouraged to pursue strategic collaborations with intermediaries, fintechs, and insurtech firms. These partnerships are expected to reinforce the nationwide presence of PSGICs and deepen insurance penetration across demographics.
Sitharaman stressed the importance of leveraging advanced data analytics and
artificial intelligence to develop precise pricing models and efficient claims modelling, which are essential for improved risk assessment and long-term sustainability.
The PSGICs have been instructed to implement these directions in a time-bound manner and regular reviews will be conducted to monitor progress and ensure the achievement of intended outcomes, said Department of Financial Services .
During the meeting, the FM also reviewed key performance indicators including premium collections, insurance penetration and density, and incurred claims ratios.
It was noted that the total premium collected by PSGICs has witnessed a notable rise from around ₹80,000 crore in 2019 to nearly ₹1.06 lakh crore in 2025. The overall general insurance industry also reported growth, with total premium collections
reaching ₹3.07 lakh crore in FY 2024–25.
While general insurance penetration in India remains relatively low at 1% of GDP — compared to a global average of 4.2% in 2023 — insurance density has steadily improved, increasing from $9 in 2019 to $25 in
Sitharaman underscored the need for PSGICs to work towards improving both penetration and density to ensure wider financial protection.
Officials also presented a five-year analysis of the health insurance segment, showing consistent premium growth across private insurers, standalone health insurers (SAHI), and PSGICs.
Incurred claims ratios, which had peaked during the COVID-19 pandemic in FY21 (PSGICs at 126% and private insurers at 105%) have since declined. By FY24, these ratios had moderated to 103% for PSGICs, 89% for private insurers, and 65% for SAHI.
The PSGICs have witnessed a significant turnaround with all of them having become profitable again.
While Oriental Insurance Company Ltd. (OICL) and National Insurance Company Ltd. (NICL) started posting quarterly profits from Q4 of F.Y. 2023-24 and Q2 of F.Y. 2024-25, respectively, United India Insurance Company Ltd. (UIICL) posted profit in Q3 of FY 2024-25 after a gap of 7 years.
Notably, New India Assurance Company Ltd. (NIACL) has consistently maintained its position as a market leader and has been making profits regularly.