core sector communique

Finance Minister to review Annual Performance of Public Sector Insurance Companies tomorrow

The Union Finance Minister Shri Pranab Mukherjee will review the annual performance of Public Sector Insurance Companies during his meeting with the Chief Executive Officers of Public sector insurance companies, here tomorrow. 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 healthy balance between the growth and long-term business sustainability as well as providing accessibility of insurance coverage in unserved areas. Besides it, the review will also 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/ policyholder-friendly. Emphasis will also be to widen the coverage under agriculture insurance by bringing in all loanee farmers as well as non-loanee farmers under the ambit of agriculture insurance. 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, and a very intense level of competition among the companies affecting prudent underwriting of premiums have affected the operating profitability of these companies, especially non-life PSU general insurance companies. 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 3/4th of the life insurance market in India, the four non-life PSU general insurance companies have about 55% of the general insurance market share.