Page 32 - Insurance Times September 2021

are being transferred to marketing officers and office giants under prevailing circumstances, which is really not a
Incharges through various lucrative schemes those million dollar question but a simple introspection of their
ultimately widen gap between marketing and administrative practices applied at the ground zero level, which majority
staff. Mostly business procurement meetings have turned of their stakeholders have failed to do it on time.
in to eating and cheating bonanzas, by and large official
tours have turned in to gift procurement ventures, vigilance Privatisation
and audit exercise have shaped in to a mere formality, office Now that the government of the day pre attempted to
discipline and decorum has much reduced. reverse this failure venture by lowering its stake and control
in these companies by bringing in General Insurance
Most importantly loyalty of employees towards its Privatisation Bill in the ongoing session of Parliament with
organization and their commitment towards the assigned the main intention to regulate insurance business in India
work has drastically gone down. All such continuous reasons instead of running it. Concept of government is clear but
over a longer period of time finally resulted in to substantial the guarantee of their experiment is ambiguous as
decrease in the overall performance of these PSU's. insurance operations itself are risky to predict.

Current Scenario Earlier experiment of bringing private sector in to the
sanctum sanctorum of Indian Insurance industry has steadily
Currently three of these companies are functioning on
shown their growth and overtaking market share to nearly
solvency debentures and fund infusions from the 55 % within 15 years of their operation. Their efforts on
government of India ( GoI ) while their big brother thrive penetration to rural India with fulfillment of the social
on the assets accumulated by its ancestors. In nutshell, all obligations as stipulated by the Indian Insurance Regulator
these four government undertakings are in financial besides providing improved customer services has established
intensive care situation. Merger of these companies in to a more potentiality of private players in this sector.
single unit, as proposed earlier by GoI, will not only lead to
the adding of their all offices and their all employees but Their low operational costs, reduced customer complaints,
also hamper their working due to synchronization of their innovative products and adoption to digital technology
different operational systems that will take sufficient time present phenomenal picture of private players to learn and
during which most of their existing business will evaporate. ponder about.

The operational cost per employee of the merger entity is Results
whopping high and disproportionate to viability of such
Now under the current digitalization era, insurance
organisation. Desparity among management and their
companies need not to have their offices down to every
ambitions shall always remain a bone of contention while location at village level instead can efficiently run on cost
discharging their responsibilities. In the meantime, minor saving efficient service on line model through their
disinvestment of one of its companies also did not yield competent representatives or qualified agents thereby
expected results instead exposed indecisiveness and week reducing their salaried staff which in turn may reduce their
financial policy of the government in this direction. management costs and increase their profitability.

Then what is it, that is ailing these Indian general insurance Reducing the control and interference of government in
Indian general insurance sector will not only give it a status
of an industry that will run on profit but its share holders
will also make it accountable for its services, which will be
key to its success.

Only regular and complete monitoring by the Insurance
Regulator and their operational safety and security by the
government of the day to its shareholders, need to be ensured
to bring back the glory to the insurance sector of India remains
to be seen in coming days. Pleasing country's some of the
economic giants and reeling to the foreign pressure,
privatization of Indian insurance portfolio must not prove only
a process of making their hay in the sunshine. T

32 The Insurance Times, September 2021