Business · Companies · 8 hrs ago
State-run insurers to submit plans to cut unprofitable business
India’s state-owned general insurers must submit turnaround plans to the government, setting out how they will reduce or leave unprofitable business.
The plans come as losses are adding pressure for an overhaul of the sector.
New India Assurance, the only state-owned general insurer to have remained profitable, reported a net loss of ₹1,267 crore in the second quarter of FY27, after a profit a year earlier.
Three public insurers remain below required solvency levels: Oriental Insurance, United India Insurance and National Insurance.
Indian rules require insurers to hold assets at least 1.5 times their liabilities, a buffer similar to a bank’s capital ratio.
The government will assess the companies on measures including underwriting, technology and organisational changes, while monitoring their performance and capital needs.
A parliamentary committee has also urged better digital checks to reduce losses from fraudulent claims.
State-run general insurers will submit board-approved plans explaining how they will scale back or exit unprofitable business segments.
The government plans to assess four public sector general insurers against a road map that includes underwriting, technology and organisational changes.
New India Assurance reported a net loss of ₹1,267 crore in the second quarter of FY27, after a profit of ₹63 crore a year earlier.
The solvency ratios of Oriental Insurance, United India Insurance and National Insurance have remained below prescribed norms.
- Who
- State-run general insurers and the government.
- What
- The insurers will submit board-approved plans detailing how they will scale back or exit unprofitable business.
- When
- Not stated.
- Where
- Not stated.
- Why
- Mounting losses have added pressure for an overhaul, and the government is seeking a focus on profitable business.
This story does not have two clearly opposing sides.
A parliamentary standing committee recommended a time-bound road map for state-run insurers to achieve organic solvency.
The government reviewed the state-owned general insurers' financial and business performance for FY26.
New India Assurance reported a net loss of ₹1,267 crore in the second quarter of FY27.
State-run general insurers are to submit board-approved plans to the government.
- Net loss
- New India Assurance reported ₹1,267 crore in the second quarter of FY27.
- Earlier profit
- New India Assurance recorded a profit of ₹63 crore a year earlier.
- First-quarter loss
- New India Assurance posted a loss of ₹256 crore in the first quarter.
- Solvency standard
- IRDAI requires insurers to maintain a surplus of 1.5 times their liabilities.
- Insurers below norms
- Oriental Insurance, United India Insurance and National Insurance have solvency ratios below prescribed norms.
What people are saying
Some verticals, including government health schemes, need sensible pricing, tighter claims oversight and properly structured reinsurance, rather than leaving excessive risk on the companies' own books.
Property claims need independent scrutiny to tackle leakage. At the same time, capital and solvency training must reach branch and regional managers, not remain confined to the head office.