The appointments committee of the cabinet announced that Sahai, currently the general manager at Oriental Insurance, will head NIA following a recommendation from the department of financial services.
The post has been vacant since July 2018 after former CMD G Srinivasan retired.
The country's largest general insurer posted a 56 percent year-on-year (YoY) drop in its net profit at Rs 3.28 billion for the September 2019 quarter.
The challenge for Sahai would be to address and curtail underwriting losses, as they had doubled during the September quarter of FY2019.
New India’s underwriting losses stood at Rs 12.3 billion for Q2 of FY2019 compared to Rs 6.3 billion in the corresponding period of the previous fiscal year.