Chennai– The All India Insurance Employees Association (AIIEA), one of the major unions in the government-owned general insurance companies, is demanding the merger of all four companies into one for faster growth, said a top leader on Friday.
“The central government is planning to merge three non-life insurance companies — United India Insurance, Oriental Insurance and National Insurance — barring New India Assurance,” Sanjay Jha, Secretary Standing committee (General Insurance, AIIEA), told IANS.
He said the government is planning to merge the three companies mainly to list and divest its holdings.
According to Jha, the union welcomes the merger idea but it should also include New India Assurance as well.
“The merger of all the four companies would prevent unhealthy competition amongst them, reduce marketing expenses. That apart, the risk retention capacity will increase for the merged entity thereby saving foreign exchange in terms of reinsurance premium outgo,” Jha added.
At a time when unions in the banking sector are against consolidation of government-owned banks, this is a diametrically opposite demand from the general insurance company union in the public sector.
According to the business figures released by the insurance regulator, the four government-owned companies had earned a premium of Rs 59,357.92 crore last fiscal commanding a market share of 46.66 per cent.
For 2015-16, the four companies had earned a total premium income of Rs 47,690.68 crore.
As to the other financial numbers, Jha said that at the end of 2015-16 the total investments of the four companies stood at Rs 110,182.41 crore; total assets Rs 145,178 crore and reserves and surplus Rs 23,779 crore.
Queried about the possible reduction in the number of branches and the staff post-merger, Jha said initially the number of branches may go down and the staff may be redeployed.
“But that will be for a short term. Post-merger, the business will grow necessitating opening new branches and adding staff strength. Look at the Life Insurance Corporation of India (LIC) which is opening new offices every year,” Jha replied.
At the end of 2015-16, the total number of branches of all the four companies stood at 8,331 and extension counters at 4,200 and the total number of staff stood at over 67,000, Jha added. (IANS)