General Insurance: Government insurance companies will stop car and health insurance, will give thousands of jobs.
Finance Ministry: The government has prepared a plan to make public sector general insurance companies profitable. These companies have now been asked to focus only on profitable business. Insurance companies have been instructed to exit loss-making businesses like motor and health insurance. Besides, these companies have also been given permission to start recruitment again. The government has recently infused Rs 7,250 crore into National Insurance, Oriental Insurance and United India Insurance. Apart from these three, New India Assurance is already running in profit.
Focus on profitable business instead of expanding business
The Finance Ministry has asked these government insurance companies to focus on profitable business instead of expanding business. Financial Services Secretary Vivek Joshi said that we are monitoring the performance of general insurance companies. His performance will be closely monitored this year. We hope that these companies will not need any more capital. This is the reason why no such provision has been made in the budget.
Improvement in financial performance of insurance companies
He said that the financial performance of these three companies has improved. Oriental Insurance has earned a profit of Rs 18 crore in FY 2024. A year ago this company was in loss of Rs 5,000 crore. National Insurance Company has reduced its loss from Rs 3,800 crore to Rs 187 crore and United India Insurance’s loss has reduced from Rs 2,800 crore to Rs 800 crore. On the other hand, the profit of New India Assurance has increased to Rs 1,100 crore.
Ban on recruitment lifted, new jobs can be given
Vivek Joshi said that many employees of these companies had retired. There was a ban on recruiting new employees. Now they have been asked to recruit gradually. This will improve the performance of these companies. Earlier these companies were expanding their business to show growth. Now they have been asked to focus only on profit. The government has invested Rs 17,450 crore to improve the financial condition of these insurance companies. Of these four, only New India Assurance is listed on the stock exchanges.
