The plan is to merge and list three public sector general insurers

New Delhi, 29 May 2020, Friday

The government has so far scrapped plans to merge the country's three public sector general insurers - National Insurance, Oriental and United India Insurance - to list the new company on the country's stock exchanges. Preparations for the merger have stalled for the past two months as the government has been focusing on protecting the country from the Kovid-12 epidemic, government sources said.

There is currently no movement on this proposed merger. Nothing is heard from the government or the consultants. "Given the current situation, we are considering a delay in the merger," said an insurance company executive.

The board of the three insurance companies had approved the merger in January this year. The management consultant had recommended that the merger process be completed by December 2020. However the merger is not currently on the government's list of priorities. "We have a number of other priorities at present," government sources said.

The merger process is not as active as it once was. Recently, the government has reshuffled the top positions of some public insurers.

With the merger, insurers have to prepare a blueprint for the public offering of the newly formed company. The government's equity stake in the company formed after the merger will be reduced. The three insurance companies are not in a good position at the moment so a merger is planned to make them healthier. However, the government does not want to rush into the primary market as the mood is not conducive due to the current Covid-12 crisis, the sources said.