FM to meet chiefs of public sector insurance cos Wednesday
Finance Minister Pranab Mukherjee will review the annual performance of public sector insurance companies Wednesday in the light of growing pressure on profitability.
New Delhi: Finance Minister Pranab Mukherjee will review the annual performance of public sector insurance companies Wednesday in the light of growing pressure on profitability.
The focus of review by the Finance Minister will be to have a business strategy for 2012-13 onwards in a manner that there is a healthy balance between the growth and long-term business sustainability as well as providing accessibility of insurance coverage in unserved areas, an official release said.
During the meeting, widening the coverage under agriculture insurance by bringing in all loanee farmers as well as non-loanee farmers under the ambit of agriculture insurance will also be discussed.
Besides it will focus on business process re-engineering so as to ensure that service delivery, including policy renewals and claim settlement as well as grievance redressal becomes more customer-friendly.
Public sector insurance companies, both in life and non- life segment play an important role not only in providing insurance coverage to people but also a crucial role in nation building exercise by providing funds for infrastructure development.
While LIC holds about 75 per cent of the life insurance market in India, the four non-life PSU general insurance companies have about 55 per cent of the general insurance market share.
A number of developments in the recent years, especially during 2011-12 such as dismantling of motor pool reserve and shifting to decline pool, losses on account of overseas operations and in reinsurance business due to natural calamity in Japan, Thailand & some other countries, have affected the operating profitability of these companies, especially non-life PSU general insurance companies, it said.
It was also affected by very intense level of competition among the companies affecting prudent underwriting of premiums, it added.