NEW DELHI: As it is already working on the merger for three state-run insurance companies, the Central government has asked the management of the three companies to give an internal assessment report by June-end for initiating the process on a priority basis. The merger was long on the card of the NDA government to improve financial health of these insurance companies. Former finance Minister Arun Jaitley had announced in his budget speech that National Insurance, United India Insurance and Oriental Insurance would be merged and listed.
The government had appointed E&Y as a consultant to see through the completion of the merger process. “The merger of all the three insurance companies is on the top of the priority list. The department along with E&Y is already working on the same. However before initiating the process, we want an internal assessment report from the management by June end,” a senior official from the Department of Investment and Public Asset Management (DIPAM) told TNIE. DIPAM had met earlier to discuss the future course for these insurance companies.
The official added that the government plans to complete the process by the end of the next quarter. Earlier there were reports that the government is looking to take the acquisition route for the three public sector general insurance companies. The final call will come only after the internal assessment report comes from these three companies.
“Apart from the financial status and roadmap, the internal assessment report will also include the rationalization of manpower and branches, updated valuation of assets among others. It will help the new Cabinet to help in smooth merger,” the official added. Apart from helping the government in raising funds for its disinvestment corpus, the move will also help in the overall strategy of consolidation in the public enterprises’ space, and to create a larger and stronger insurance company. in the future.