Insurance Company Merger: Amidst reports of mergers of public sector banks, the government is now making significant preparations to merge insurance companies. The government is preparing to merge three public sector insurance companies.
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Insurance Company Merger: Amidst reports of mergers of public sector banks, the government is now making major preparations to merge insurance companies. The government is preparing to merge three government-owned insurance companies. The Finance Ministry is accelerating plans to merge three public sector general insurance companies. Preparations are underway to bring all three insurance companies under one umbrella.
Which Insurance Companies Will Be Merged?
The insurance companies being merged include Oriental Insurance, National Insurance, and United India Insurance. The plan to bring these three companies under a single entity is being reconsidered. This decision aims to improve the financial health of the insurance companies.
Why the merger is being considered?
To improve the financial health of insurance companies, the Finance Ministry is once again considering merging them. Between the financial years 2019-20 and 2021-22, the government infused a total of ₹17,450 crore into the three insurance companies to help them overcome financial difficulties. The merger is being considered again to improve their operations and strengthen their financial standing. The merger of the three insurance companies aims to create a larger company, reducing their expenses and losses, and strengthening their market position.
The announcement had already been made.
It’s worth noting that the merger of three insurance companies was announced in the 2018-19 budget. However, this plan was shelved in July 2020. Now, preparations are underway to revive it. The government is focusing on mergers and privatization to reduce NPAs and improve the financial health of public sector companies and banks.
