3 GI giants to be merged

India’s state-owned general insurance giants Oriental Insurance, National Insurance, and United India Insurance, who together have 34 percent of the total market share and underwriting total direct premium of over INR33,000 crore (USD49.6 billion), are likely to be merged to create a stronger entity to fetch better valuations at the time of listing.

In January the government formally approved to list five state run general insurers while announcing its intent to pare its stake in these firms to 75 percent in one or more tranches.

“It is in a preliminary stage. We are looking at various options,” a senior finance ministry official said to the Economic Times.

The listing plans of GIC Re, the state-owned reinsurer and New India Assurance is already in the works, the official said.

“Consolidation in state-run companies is being explored across all sectors. In insurance, it is necessary that we have presence of state run entities as they serve the larger purpose of financial inclusion and also to ensure there is there is enough competition,” he said.