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NEW DELHI- The Indian government has announced its plan to infuse more capital in public sector general insurers in the next financial year. This move is aimed at strengthening the financial position of these insurers and improving their ability to provide insurance cover to individuals and businesses across the country.
According to reports, the government is expected to infuse around Rs. 3,000 crore in four public sector general insurers – National Insurance Company, Oriental Insurance Company, United India Insurance Company, and New India Assurance Company. This is part of the government’s overall plan to infuse Rs. 6,950 crore in these companies over the next two financial years.
The decision to infuse more capital in these insurers comes after the government’s recent decision to merge three public sector general insurers – National Insurance Company, United India Insurance Company, and Oriental Insurance Company – into one entity. The merger is expected to create a stronger and more efficient insurer that can better compete with private insurers in the market.
The infusion of capital will not only strengthen the financial position of these insurers but will also help them expand their reach and provide better insurance products and services to customers. It will enable these companies to improve their solvency ratios and meet regulatory requirements, which is crucial for maintaining customer trust and confidence.
Moreover, the infusion of capital will also help these companies improve their claims settlement ratios and customer service, which are critical factors in the highly competitive insurance market. By strengthening the public sector insurance companies, the government aims to increase insurance penetration in the country, especially among the rural and underprivileged sections of the society.
It is worth noting that public sector general insurers are an important component of the Indian insurance industry, accounting for a significant portion of the market share. These companies have been serving the Indian customers for many years, providing insurance cover for a wide range of risks, including health, motor, property, and liability.
In conclusion, the government’s decision to infuse more capital in public sector general insurers is a positive step that will help strengthen these companies and improve their ability to serve customers. It will also help increase insurance penetration in the country, which is critical for achieving inclusive growth and development. With the infusion of capital and the planned merger, the public sector general insurers are expected to become stronger and more competitive in the Indian insurance market, providing greater benefits to customers.
