State-owned non-life insurers reported a notable turnaround in their financial performance for the fiscal year 2023-24 (FY24). They achieved a combined net profit of Rs 7,558 crore, a significant improvement compared to the loss of approximately Rs 3,529 crore recorded in FY23. This information was provided by Pankaj Chaudhary, Minister of State for Finance, in a written response to a question in the Lok Sabha.
Public-Sector General Insurers
The public-sector general insurers include the following entities:
- New India Assurance Company
- Oriental Insurance
- United India Insurance
- National Insurance Company
Additionally, General Insurance Corporation (GIC Re) serves as the sole state-owned reinsurer in the country. The Agriculture Insurance Company operates as the public-sector agriculture insurer.
Recent Developments and Government Actions
Recently, the Department of Financial Services Secretary, Vivek Joshi, indicated that the government has advised state-owned general insurers to exit the motor and health insurance segments. These segments have been identified as significantly loss-making. The recommended move is aimed at enhancing the financial health and operational efficiency of these insurers by focusing on more profitable areas.
Capital Infusion and Strategic Measures
To address solvency concerns, the government injected capital amounting to Rs 17,450 crore over three years, from FY20 to FY22. This infusion was intended to restore solvency levels and manage control.
In response to financial challenges, companies have implemented various measures to improve profitability. These include adopting key performance indicators (KPIs) for both the company and employees, enhancing IT capabilities, launching new products, and establishing centralized hubs for underwriting and claims processing. According to Chaudhary, these steps have started to positively impact the financial position of the insurers.
