Merger of three public sector insurance Co’s namely oriental insurance, United India insurance & National insurance co. is at the advance stage. The Govt. had declared merger of the three public sector insurance co’s & to facilitate the smooth merger a capital infusion of Rs. 2500 cr. was approved in Feb-2020. The consultant E & Y had suggested for the same to improve the solvency ratio of the insurers which has gone below the regulatory norms.
Now the gazette notification has been issued for the same on 18th of the march 2020 as per which the National Insurance co has been allocated a lions share of Rs. 2400 cr. to improve its financial health whereas the United India & Oriental insurance have been given a meager Rs.50 cr. each. It is said that that both the companies may be given some big amount in next round of re-capitalization.
Gazette Notification: Merger amendent scheme 2020
The public sector insurers are losing market share to Pvt. Players with every passing year & also regularly making huge underwriting losses for the last ten year. So the Govt has planned to merge the three of the public sector insurers to form one giant insurance entity.
The analytical table hereunder listing ICR wise standing of all the non-life general insurers with public sector lying at bottom of the ladder.
| PVt. Sector Insurers 2017-18 | NET PREMIUM WRITTEN | CLAIMS INCURRED (NET) | % ICR |
| Edelweiss General Insurance Co.Ltd. | 0.18 | 0.00 | 1.09 |
| DHFL General Insurance Co.Ltd. | 90.47 | 1.82 | 2.02 |
| Go Digit General Insurance Ltd. | 75.44 | 7.01 | 9.30 |
| Acko General Insurance Limited | 0.36 | 0.10 | 27.86 |
| Universal Sompo General Insurance Co. Ltd. | 1376.36 | 674.03 | 48.97 |
| Kotak Mahindra General Insurance Co. Ltd. | 162.94 | 83.03 | 50.96 |
| Liberty Videocon General Insurance Co. Ltd. | 699.85 | 403.09 | 57.60 |
| Bajaj Allianz General Insurance Co. Ltd. | 6732.54 | 4042.57 | 60.05 |
| Tata AIG General Insurance Co. Ltd. | 3933.02 | 2366.07 | 60.16 |
| Raheja QBE General Insurance Co. Ltd. | 75.95 | 46.02 | 60.60 |
| Future Generali India Insurance Co. Ltd. | 1511.08 | 969.35 | 64.15 |
| Cholamandalam MS General Insurance Co. Ltd. | 3191.26 | 2048.36 | 64.19 |
| HDFC ERGO General Insurance Co. Ltd. | 3455.48 | 2226.68 | 64.44 |
| ICICI Lombard General Insurance Co. Ltd. | 7844.76 | 5314.72 | 67.75 |
| IFFCO Tokio General Insurance Co. Ltd. | 3653.40 | 2682.71 | 73.43 |
| Magma HDI General Insurance Co. Ltd. | 375.61 | 277.42 | 73.86 |
| SBI General Insurance Co. Ltd. | 1727.00 | 1316.45 | 76.23 |
| Reliance General Insurance Co. Ltd. | 3163.55 | 2419.14 | 76.47 |
| Royal Sundaram Alliance Insurance Co. Ltd. | 2032.09 | 1560.37 | 76.79 |
| Bharti Axa General Insurance Co. Ltd. | 1268.33 | 1006.73 | 79.37 |
| Shriram General Insurance Co. Ltd. | 1977.15 | 1739.00 | 87.95 |
| Total | 43346.80 | 29184.70 | 67.33 |
The table above show the incurred claim ratio of the Pvt. sector insurers is about 67% for the year 2017-18 whereas the public sector ICR is above 91%. The New India & Oriental insurance however maintained the ICR to some reasonable levels.in the given year.
| Public Sector Insurers 2017-18 | NET PREMIUM WRITTEN In cr | CLAIMS INCURRED (NET) in cr | ICR % |
| New India Assurance Co. Ltd | 20956.35 | 16896.47 | 80.63 |
| Oriental Insurance Co. Ltd | 10028.23 | 8221.21 | 81.98 |
| United India Insurance Co. Ltd | 12390.47 | 12137.81 | 97.96 |
| National Insurance Co. Ltd | 11465.01 | 12870.68 | 112.26 |
| Total | 54840.06 | 50126.17 | 91.40 |
Comparative table of net premium, incurred claim amount & ICR for 2018-19
Pvt. Sector Insurers 2018-19 |
NET PREMIUM WRITTEN | CLAIMS INCURRED (NET) | % ICR |
| DHFL General Insurance Co.Ltd. | 129.09 | 30.77 | 23.83 |
| Acko General Insurance Limited | 98.25 | 28.61 | 29.12 |
| Go Digit General Insurance Ltd. | 955.37 | 394.11 | 41.25 |
| Edelweiss General Insurance Co.Ltd. | 73.57 | 35.31 | 47.99 |
| Kotak Mahindra General Insurance Co. Ltd. | 267.15 | 134.32 | 50.28 |
| Magma HDI General Insurance Co. Ltd. | 516.93 | 271.69 | 52.56 |
| Liberty Videocon General Insurance Co. Ltd. | 990.39 | 591.05 | 59.68 |
| Bajaj Allianz General Insurance Co. Ltd. | 7774.46 | 4810.41 | 61.87 |
| Future Generali India Insurance Co. Ltd. | 1721.46 | 1083.05 | 62.91 |
| Shriram General Insurance Co. Ltd. | 2180.08 | 1406.32 | 64.51 |
| Universal Sompo General Insurance Co. Ltd. | 1347.83 | 879.67 | 65.27 |
| ICICI Lombard General Insurance Co. Ltd. | 9538.56 | 6308.12 | 66.13 |
| HDFC ERGO General Insurance Co. Ltd. | 4372.79 | 2909.18 | 66.53 |
| SBI General Insurance Co. Ltd. | 2558.21 | 1720.57 | 67.26 |
| Cholamandalam MS General Insurance Co. Ltd. | 3352.32 | 2335.50 | 69.67 |
| Bharti Axa General Insurance Co. Ltd. | 1516.38 | 1076.68 | 71.00 |
| Tata AIG General Insurance Co. Ltd. | 5047.02 | 3586.37 | 71.06 |
| Raheja QBE General Insurance Co. Ltd. | 105.11 | 74.78 | 71.15 |
| Reliance General Insurance Co. Ltd. | 3691.47 | 3031.30 | 82.12 |
| Royal Sundaram Alliance Insurance Co. Ltd. | 2211.00 | 1854.85 | 83.89 |
| IFFCO Tokio General Insurance Co. Ltd. | 4187.63 | 3558.22 | 84.97 |
| Stand Alone Health Insurers
Total |
8914.30
61549.36 |
4750.43
40871.31 |
53.29
66.40 |
Analyzing the above figures one can notice the growth rate of Pvt. players which is over 20% & still maintaining the ICR below 70%. The pure technology based new entrant ” Go Digit” has gone up the ladder from premium of 75 cr to 955 cr & also maintained realy good ICR level of 41% only. The achievement is with minimal of the manual intervention of in business procurement as well as claim settlement. Both the verticals are being handled with help of digital applications. Among the mid-size companies, “Bajaj Allianz” is the best performer with about 60% ICR levels.
Public Sector Insurers 2018-19 |
NET PREMIUM WRITTEN (In crores) |
NET CLAIMS INCURRED (in crores) |
ICR % |
| New India Assurance Co. Ltd | 22120.86 | 20496.70 | 92.66 |
| Oriental Insurance Co. Ltd | 10845.39 | 11248.08 | 103.71 |
| United India Insurance Co. Ltd | 13792.46 | 14336.09 | 103.94 |
| National Insurance Co. Ltd | 9650.61 | 11434.02 | 118.48 |
Total |
56409.31 |
57514.90 |
101.95 |
In addition, the management expanses are around 30% for both the Pvt & public sector insurers. which push up the underwriting losses
In the public sector space, again the “New India Assurance” has performed better than its public sector peers although it has also slid down from the previous year levels.
Now with happening of merger & thereafter rationalizing of the offices & work force along with the application of the digital processes, the scenario in the public sector is also expected to improve.
J.D.Batta-Surveyor
Admin claim Hub-Chandigarh