Active Stocks
Fri Mar 01 2024 15:59:51
  1. Tata Steel share price
  2. 150.00 6.46%
  1. State Bank Of India share price
  2. 769.30 2.67%
  1. Tata Motors share price
  2. 977.20 2.78%
  1. ITC share price
  2. 409.50 0.74%
  1. ICICI Bank share price
  2. 1,086.90 3.18%
Business News/ Insurance / News/  Oriental Insurance, National Insurance, United India Insurance may get capital infusion in Q4
BackBack

Oriental Insurance, National Insurance, United India Insurance may get capital infusion in Q4

The capital infusion would be based on the financial performance of the three general insurers in nine months, a report says

Last year, the government had provided ₹5,000 crore capital to National Insurance, Oriental Insurance and United India Insurance. mintPremium
Last year, the government had provided 5,000 crore capital to National Insurance, Oriental Insurance and United India Insurance. mint

The Union finance ministry may consider capital infusion in three loss-making public sector general insurance companies -- National Insurance Company Ltd, Oriental Insurance Company Ltd and United India Insurance Company -- in the fourth quarter of the current fiscal year, a report by PTI said on Sunday. 

The capital infusion would be based on the financial performance of the general insurers  in nine months, the report also said.

According to the PTI report citing sources, the finance ministry last year asked three insurers to chase bottomlines rather than topline and underwrite only good proposals.

Last year, the government had provided 5,000 crore capital to National Insurance Company Ltd, Oriental Insurance Company Ltd and United India Insurance Company. 

Kolkata-based National Insurance Company was provided 3,700 crore, followed by Delhi-based Oriental Insurance Company ( 1,200 crore) and Chennai-based United India Insurance ( 100 crore).

During fiscal year 2019-20, the government infused 2,500 crore in these three companies. In the following year, it increased substantially to 9,950 crore and 5,000 crore in fiscal year 2021-22.

“The financial review would give some idea about the impact of restructuring initiated on the profitability numbers and the solvency margin," said the report.

The solvency margin, the extra capital the companies must hold over and above the claim amounts they are likely to incur, acts as a financial backup in extreme situations.

The three general insurers  have been asked to improve their solvency ratio and meet the regulatory requirement of 150%.

The solvency ratio is a measure of capital adequacy. A higher ratio reflects better financial health and the ability of the company to pay claims and meet future contingencies and business growth plans.

The solvency ratio of the three public sector general insurance companies is below the regulatory requirement of 150%.

Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!

Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Check all the latest action on Budget 2024 here. Download The Mint News App to get Daily Market Updates.
More Less
Published: 22 Oct 2023, 05:21 PM IST
Next Story footLogo
Recommended For You
Switch to the Mint app for fast and personalized news - Get App