A consultant is expected to be appointed by next month for facilitating the proposed merger of three state-owned general insurers -- National Insurance Company, Oriental India Insurance Company and United India Assurance.
During the last Budget speech, Union Minister Arun Jaitley had proposed to merge these public sector insurers into a single insurance entity and subsequently list the entity.
"The process is going on. It is expected to be completed by end of next fiscal," National Insurance Company's Chairman and Managing Director Tajinder Mukherjee said at an interactive session organised here by the Merchants Chamber of Commerce.
Asked whether the consultant has already been appointed, she said: "The process is on for short-listing and issuing the letter but not yet appointed. Maybe, (the consultant will be appointed by) next month."
She said the merger of three public sector general insurers would be good for the industry as the merged entity would be having more risk taking abilities and it could have a better service model.
The city-headquartered insurer was expecting a flat growth in gross direct premium collection in the current fiscal.
"We don't have ambitious growth (targets) because products portfolio is being re-looked into. We are concentrating on retail (mostly agent driven-business) this year. Maybe, we end the year on a flat or slightly higher growth," she said.
Up to December in the current financial year, its gross direct premium underwritten was at Rs 10,615.29 crore, down by 9.52 per cent from Rs 11,732.21 crore in the same period of the previous fiscal.
Responding to a query whether the insurance products with catastrophe cover are gaining popularity after the devastating flood in Kerala, she said products with catastrophe cover are available in the market but these products have not been popular among buyers.
Mukherjee also said new regulatory and legislative mechanisms provide new insurance requirements which force insurers to bring new products and for example the RERA Act brought in the liability for builders on the part of title insurance to shield the interest of the owners against any shortcoming in the title to a property and also on structural defect insurance.
Responding to a query on how the insurer is getting responses on the title and construction defect policies, she said, "No buyers...these were put in the Act but there is no mechanism to enforce it. Unless the people who are not doing it get penalised, where is the incentive to buy it? Unless the government is making it enforceable, I do not see it taking up."
She said insurance companies are making representations to the government about this.
--IANS
bdc/prs
Disclaimer: No Business Standard Journalist was involved in creation of this content
