The four public sector general insurance companies (PSGICs) in India have achieved a remarkable turnaround in their financial performance, posting a combined profit of ₹1,066 crore by the third quarter of the current financial year. This is a significant improvement from the massive losses of over ₹10,000 crore they incurred in 2022-23. According to a finance ministry statement, the turnaround is attributed to several factors, including improved risk-management practices, loss control initiatives, adoption of technology, development of new products, better customer services, and diversification of portfolio.
Two of the PSGICs, Oriental Insurance Company Ltd. and National Insurance Company Ltd., started posting quarterly profits from the second quarter of 2023-24 and 2024-25, respectively. On the other hand, United India Insurance Company Ltd. broke its seven-year profitless streak by posting a profit in the third quarter of the current financial year. This resurgence in profitability is a testament to the efforts of the insurance companies to revamp their operations and adapt to changing market conditions.
The statement highlights the importance of improved risk-management practices, which have helped the PSGICs to better assess and mitigate risks associated with their policies. Additionally, the adoption of technology has enabled the insurers to streamline their operations, enhance customer experience, and reduce costs. The development of new products and diversification of portfolio have also contributed to the improved financial performance, allowing the companies to cater to a broader range of customers and absorb volatility in the market.
The turnaround in the financial performance of the PSGICs is likely to have a positive impact on the Indian insurance industry as a whole. It will not only help to enhance the confidence of customers in the sector but also attract new investors and further growth. The government can also benefit from the improved profitability of these state-run insurance companies, as they are major contributors to the country’s economy.
The success of the PSGICs is a result of the strategic reforms implemented by the government and the insurance companies themselves. The government has been focusing on liberalizing the insurance sector, increasing the foreign equity limit, and facilitating mergers and acquisitions to enhance competition and efficiency. The insurance companies have also been working to improve their operational efficiency, enhance customer service, and develop new products to meet the changing needs of customers.
In conclusion, the PSGICs’ remarkable turnaround is a significant achievement, and their improved financial performance is expected to have a positive impact on the Indian insurance industry. The success of these state-run insurance companies is a result of their efforts to adapt to changing market conditions, improve risk-management practices, and adopt technology. As the sector continues to evolve, it is likely that the PSGICs will remain key players, driving growth and supporting the Indian economy.