It has been declared by Nirmala Sitharaman, the Finance Minister that there will be merging of Insurance, National Insurance, and United India for creating the biggest non-life insurance firm of India.
There will be a modification in the General Insurance Business Nationalization Act in Budget 2019 to 2020 to execute the same.
However, according to a few estimations, there will be a loss of 10 to 15 thousand jobs after the completion of this merger.
According to the news, the government has the intention of expediting the merger of 3 public sector general insurance firms which are United India Insurance Company, Oriental Insurance Company, as well as, National Insurance Company, respectively.
It was told by the sources that previously the department of disinvestment had separate ideas as of how will the merger of three mega-firms going to happen for maximizing the valuation potential. After everything was examined over time, they took the decision of going ahead with the bright merger plan whose announcement was made in Budget 2018 to 2019.
KK Srinivasan, an ex-member of the Insurance Regulatory and Development Authority of India passed a statement that said that the merger of 3 fragile firms might not instantly create a stronger one. However, for sure it will eliminate desperate business competition amongst the three.
What are the expected challenges the merged firms will be facing? There is a need to take into consideration that the three firms have distinct technology, as well as, Information technology platforms.
So the migration of platform migration and integrating the firms will be a challenge that will be faced by the firm soon. Other than this, there will also be challenging Human Resource problems considering the proliferation of trade unions in the 3 PSU insurance firms.
Tags : General Insurance Business Nationalization, platform migration, Human Resource, 3 PSU insurance firms,