The Indian Public Sector General Insurance Companies (PSGICs) have reported a significant turnaround in their financial performance, achieving a profit of Rs. 1,066 crore in the third quarter of the financial year 2024-25. This marks a notable improvement from the collective loss of over Rs. 10,000 crore reported in 2022-23. The four PSGICs – Oriental Insurance Company Ltd. (OICL), National Insurance Company Ltd. (NICL), United India Insurance Company Ltd. (UIICL), and New India Assurance Company Ltd. (NIACL) – have all contributed to this turnaround.
OICL and NICL have started reporting quarterly profits, with OICL achieving profitability in the fourth quarter of FY 2023-24 and NICL in the second quarter of FY 2024-25. UIICL has also achieved profitability in Q3 FY 2024-25, its first profitable quarter in seven years. NIACL, on the other hand, has consistently remained profitable and continues to dominate the market.
The government has played a crucial role in revitalizing the PSGICs by implementing strategic reforms and introducing performance-based monitoring systems. A total capital infusion of Rs. 17,450 crore was provided to these companies between 2019-20 and 2021-22 to support structural improvements, enhance operational efficiency, and restore financial stability.
The key factors contributing to this financial turnaround include improved risk management practices, adoption of advanced technologies, effective loss control measures, diversification of products, and enhanced customer service. The PSGICs have been able to reduce their losses and achieve profitability through these efforts.
The achievement of profitability by the PSGICs is a significant development, indicating a positive trend in the Indian insurance sector. The government’s support and the companies’ efforts to improve their operations and services have paid off, and the sector is expected to continue to grow and stabilize in the coming years. The PSGICs’ turnaround is a testament to the effectiveness of strategic reforms and performance-based monitoring systems in improving the financial performance of public sector enterprises.