PSU general insurance firms to rationalise branches & cut avoidable expenses: Finance Ministry

New Delhi: Public sector general insurance firms have been asked to rationalise branches and cut avoidable expenses to improve their financial health. The finance ministry mentioned four public sector general insurers, National Insurance, Oriental Insurance, and United India Insurance are loss-making. This comes after the finance minister announced the privatisation agenda in her Budget 2021-22 which also includes privatisation of two public sector banks and one general insurance company.

According to PTI, The advisory of the ministry follows Parliament’s approval to a bill to allow privatisation of state-owned general insurers in August in line with the Budget announcement. The finance ministry has asked these companies to rationalise branches and also trim administrative layers wherever possible, sources said.

General Insurance Employees All India Association general secretary K Govindan said. "Public sector general insurance firms are implementing various government schemes. Rationalisation of branches should not lead to hardship for the poor as they may have to travel long distances for settlement of their small claims for example cattle insurance or fasal bima."