FinMin to hold 2-day deliberations with PSU insurer heads from Friday

The finance ministry will hold a two-day meeting, beginning Friday, with heads of public sector insurance companies to find out ways and means to strengthen their financial health and improve insurance penetration in the country.

The meeting would be addressed by Finance Minister Arun Jaitley.

The chief executives of the public sector insurance companies will brainstorm on business process re-engineering, improvement of financial health, introduction of innovative products among others, sources said.

The two-day 'Insurance Manthan' would conclude on Saturday, October 6, sources said.

Besides, sources said, companies would also discuss means to improve insurance penetration and density so that India becomes insured society.

The measure of insurance penetration and density reflects the level of development of the insurance sector in a country. While insurance penetration is measured as the percentage of insurance premium to GDP, insurance density is calculated as the ratio of premium to population (per capita premium).

The insurance density rose to USD 59.7 in 2016 as against USD 54.7 in 2015 while insurance penetration remained unchanged at 2.72 per cent 2016, as per the latest Insurance and Regulatory and Development Authority of India data.

There are one public sector life insurer, LIC, the biggest in the country. Four general insurance companies -- National Insurance, New India Assurance, Oriental Insurance and United India Insurance. Besides, there is one re-insurance firm GIC-Re.

In addition to these, two specialised state-owned insurers are ECGC and Agriculture Insurance Company of India Ltd.

Of all these insurance companies, only New India Assurance and GIC Re are listed at the stock exchanges.

Meanwhile, the government has initiated the merger of three public sector general insurers in line with the Budget announcement.

Union Finance Minister Arun Jaitley in the Budget speech had announced that the three companies would be merged into a single insurance entity. The process of merger is likely to be completed during the current fiscal.

"Three public sector general insurance companies National Insurance Company Ltd, United India Assurance Company Limited and Oriental India Insurance Company Limited will be merged into a single insurance entity and will be subsequently listed," he had said.