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July 18, 2019
The Indian government is reportedly planning to form a single mega entity by consolidating all four state-run insurers-Oriental, National, United India and New India.
The government of India feels that if Oriental, National and United were to be merged into one entity, the merged entity would compete against New India and the two sides could undercut one another. Hence, the government is studying merging the first three insurers and then getting New India, which is a listed company, to acquire the merged entity.
The proposed single state controlled non-life insurer would be an insurance giant on the lines of LIC, but operating in the general insurance space. As per the latest IRDAI data, New India had a market share of 16.8% in terms of gross direct premium at the end of May. The combined share of the other three state-run insurers was about 25%.
The government also is likely to announce an injection of INR40bn ($573m) in the three unlisted public sector general insurance companies to shore up their capital.