New Delhi: Bids have been invited from consultants to advise on the proposed merger of three public sector general insurance firms as announced in this year's budget.
There is a proposal by the government to merge three public sector general insurance companies (PSGICs) -- National Insurance Company Ltd, Oriental Insurance Company Ltd and United India Insurance Company Ltd.
"PSGICs invite expression of interest (EoI) from companies/firms interested to provide consultancy services for the merger of the three firms into one strong single entity, creating enterprise value and shareholders worth for better listing," a public notice said.
As on March 31, 2017, PSGICs together had more than 200 insurance products with a total premium of Rs 41,461 crore and a market share of around 35 per cent.
The combined net worth of three companies is Rs 9,243 crore with total employees' strength of around 44,000 spread over 6,000 offices.
The consultant is expected to advise on organisational restructuring, rationalisation of human resources, management of operational issues, regulatory and compliance issues, it said.
The consultant is expected to handhold the management of all the three companies, throughout merger process till the new organisation is formed and set in place, it said.
The last date for submission of bids is July 16.
Union Finance Minister Arun Jaitley in the Budget speech had announced that the three companies would be merged into a single insurance entity. The process of merger is likely to be completed during the current fiscal.
"Three public sector general insurance companies National Insurance Company Ltd, United India Assurance Company Limited and Oriental India Insurance Company Limited will be merged into a single insurance entity and will be subsequently listed," he had said.
The profitability of most general insurance companies including the state-owned ones has been under pressure owing to rising underwriting losses and higher claims.
In 2017, the government listed two state-owned insurers New India Assurance Company Ltd and General Insurance Corporation of India.