The non-life insurance sector witnessed Rs 44-crore loss in FY19 as National, Oriental Insurance and United India have together reported losses of Rs 4,200 crore, which is more than the collective profits of the remaining 23 companies.
The government is looking for a merger and a subsequent listing of these companies. However, due to their poor financial performance, they will require a capital infusion. The performance of the PSU insurers in FY19 is in sharp contrast to their financials in FY18.
The four PSU insurers, inclusive of the listed New India Assurance, reported a combined net profit of Rs 2,543 crore in FY18. In FY19, the four PSU insurers reported a combined loss of Rs 3,628 crore despite New India turning in a Rs 645-crore profit.
At the same time, the private insurers have reported a net profit of Rs 3,584 crore, registering a decline of 8%. Industry officials say that profits have declined partially because the industry did very well in crop insurance in the previous year, which was not the case in the year under review. In addition, underwriting losses in property insurance have been very high, prompting the General Insurance Corporation to increase rates in some segments.
