Page 6 - Insurance Times JUNE 2022

privatization and begin the work on it general insurance companies last finan- the insurance business to pare debt,
after their first-quarter earnings are in. cial year, some more fund requirement which may save the company from fac-
is there to bring them back on profit- ing the rigour of the insolvency pro-
Federal think tank NITI Aayog is said to
ability path, sources said. cess, according to industry sources.
have recommended United India In-
surance for privatization to a core Capital infusion of Rs 3,000-5,000 crore FEL would raise nearly Rs 2,950 crore
group of secretaries on disinvestment, may be done in these companies based and will pay to its lenders, he added.
the people said, though the name is on their performance, sources said,
"This is part of the exercise that Future
yet to be finalized. adding, the government has already
Group is doing to pay off as much debt
enhanced their authorised capital
A group of ministers (GoM) will take of various cos so they can be
keeping further fund infusion in mind.
the final call on the candidate for regularised and do not go into insol-
privatization. vency," he said.
PSU insurers to hire con-
United India Insurance is not in the
best of financial health, reporting a loss sultant for revamp Experts call for climate risk
of Rs. 1,485 crore in 2019-20; still, the
PSU general insurers will hire an exter- insurance in fisheries sec-
insurer is considered the best candidate
nal consultant to advise them on
for privatization, given its nationwide tor
organisational restructuring and per-
presence and strong market share in At a time when the lives and property
formance management. This comes as
various insurance categories. Its losses of thousands of fisherfolk families are
the government is moving ahead with
dropped to Rs 985 crore in FY21, and jeopardised by sea level rise and cli-
its plans to privatise one insurer in this
is estimated to have further narrowed mate-induced weather uncertainties,
fiscal.
in FY22. fishery experts have suggested climate
"The government has recently infused
risk insurance as an option to deal with
capital in three insurers and this is the
Govt may infuse Rs. 3K-5K the risks following natural calamities.
next step to improve on their opera-
cr into insurers tional efficiencies," said an executive Highlighting that penetration of insur-
ance is still low in the fisheries sector,
The government may infuse Rs 3,000- aware of the matter, adding this may
especially in capture fisheries, they said
5,000 crore additional capital in the also help to increase the valuation of
parametric insurance could be a viable
three public sector general insurance the firms which may be privatised.
option to move forward in mitigating
companies based on their performance
GIPSA have floated a request for pro-
climate risks.
and requirement during the year,
posal or RFP to restructure the insur-
sources said. "Parametric insurance programmes
ers, achieve profitability and employee
can be developed based on weather
The capital infusion would help im- development.
and ocean observation models even
prove the financial health of the gen-
"There is a proposal for restructuring
eral insurance firms -- National Insur- with limited data", they said.
the organisation to bring in profitable
ance Company Limited, Oriental Insur- The experts were speaking at an inter-
growth and employee development
ance Company Limited and United In- national symposium on 'Insulating
through performance management
dia Insurance Company. Marine Fisheries
and capability management, in align-
In the last financial year, the govern- ment with the KPIs devised by the Sector in South Asia from Uncertain-
ment made capital infusion of Rs 5,000 PSGICs," the RFP noted, adding that ties: Global Experiences with Insur-
crore in these three insurance compa- the last date for submission of bids is ance' jointly organised by the Bay of
nies. June 2, 2022. Bengal Programme Inter-governmen-
During 2020-21, Rs 9,950 crore was tal Organisation (BOBP), the Central
infused in three PSU general insurers Future arm to raise Rs. Marine Fisheries Research Institute
by the government out of which Rs (CMFRI), and Tamil Nadu J Jayalalithaa
3,000 crore from insurance
3,605 crore was infused in United In- Fisheries University in collaboration
dia Insurance, Rs 3,175 crore in Na- biz sale with the World Bank, as a side event
tional Insurance and Rs 3,170 crore in during the 12th Indian Fisheries and
Debt-ridden Future Group firm Future
Oriental Insurance. Aquaculture Forum held in Chennai.
Enterprises Ltd expects to raise around
Fund support was given to the weak Rs 3,000 crore from selling its stake in The symposium called for subsidising
6 The Insurance Times, June 2022