FinMin to invest an extra Rs 3,000 crore in PSU general insurance companies.
FinMin to invest an extra Rs 3,000 crore in PSU general insurance companies.
The Indian government’s efforts to improve the health of the country’s loss-making public sector general insurance companies appear to be continuing in earnest. According to sources in the finance ministry, there are plans to inject an additional Rs 3,000 crore of capital into these insurers in the current fiscal year, on top of the Rs 5,000 crore already allocated in FY22.
The three insurers in question are National Insurance Company Limited (NICL), Oriental Insurance Company Limited (OICL), and United India Insurance Company (UIIC). All three have been struggling with financial losses and a marked decline in market share. The infusion of capital is aimed at helping them to improve their financial situation and regain their market position.
The action is a part of the government’s larger plan to assist the nation’s insurance industry, which has faced several difficulties in recent years. A decline in profitability has been caused by the industry being severely impacted by rising claim ratios and escalating competition from private competitors.
FinMin to invest 3000 crores in FY24:
The prior infusion of Rs 5,000 crore from the government in FY22 was intended to bolster the balance sheets of the three insurers and raise their solvency ratios. Additionally, it was meant to aid in their initiatives to broaden their selection of products and enhance their digital prowess.
The additional capital infusion of Rs 3,000 crore is expected to further boost the three companies’ efforts to turn their fortunes around. It will provide them with the financial resources needed to address their capital shortfalls and strengthen their underwriting capabilities.
The move is also likely to have a positive impact on the wider insurance sector, as it will help to stabilize the market and improve the overall competitiveness of the industry. It will also provide a much-needed boost to the government’s efforts to promote financial inclusion and increase access to insurance products for the country’s citizens.
