Indian Public Sector Insurance Companies Make a Stunning Comeback, Turn Profitable After Years of Losses
In a remarkable turnaround, all four Indian Public Sector General Insurance Companies (PSGICs) have returned to profitability after years of struggling with losses. This positive change comes after the government introduced significant reforms and provided financial support to help these companies improve their operations and financial health. The DFS (Department of Financial Services) also praised the Public Sector General Insurance Companies on social media platform.
Which Companies Are Profitable Now?
- Oriental Insurance Company Ltd. (OICL) started reporting profits from the fourth quarter (Q4) of the financial year 2023-24.
- National Insurance Company Ltd. (NICL) began making profits from the second quarter (Q2) of the financial year 2024-25.
- United India Insurance Company Ltd. (UIICL) posted a profit in the third quarter (Q3) of FY 2024-25 after seven years of losses.
- New India Assurance Company Ltd. (NIACL), the market leader, has consistently remained profitable.
How Did This Turnaround Happen?
The government of India has been actively working to strengthen public sector insurance companies. Over the years, it introduced several reforms, including regular monitoring based on key performance indicators (KPIs). Additionally, the government infused ₹17,450 crore into these companies between 2019 and 2022 to help them undertake structural reforms, improve operational efficiency, and return to profitability.
The insurance companies also took several steps to improve their performance:
- Better Risk Management: They adopted improved practices to manage risks effectively.
- Loss Control Initiatives: Measures were taken to reduce losses and improve financial stability.
- Technology Adoption: The companies embraced new technologies to streamline operations and enhance customer services.
- New Products: They developed innovative insurance products to attract more customers.
- Diversification: The companies expanded their portfolios to include a wider range of insurance services.
In the financial year 2022-23, the combined losses of these companies exceeded ₹10,000 crore. However, by the third quarter (Q3) of the current financial year (2024-25), all four PSGICs became individually profitable, posting a combined profit of ₹1,066 crore. This marks a significant achievement for the public sector insurance industry.
The public sector insurance companies are committed to maintaining this positive trend. They plan to continue rolling out new initiatives and strategic measures to further strengthen their financial stability and improve customer services. Their goal is to offer high-quality insurance products and ensure long-term sustainability while achieving growth.
The PSGICs are also aligned with the government’s broader vision of achieving “Insurance for All” by 2047. This means ensuring that every citizen in India has access to affordable and reliable insurance services.
The government and industry leaders have praised the hard work and dedication of the management and employees of these companies. The turnaround is seen as a testament to the effectiveness of strategic reforms and government support in building a strong and resilient insurance sector.
