News Non-Life10 Aug 2018

India:Merger of 3 state-owned general insurers postponed till late 2019

10 Aug 2018

The much publicised proposed merger of three state-owned general insurance companies is likely to be pushed to the next financial year beginning on 1 April 2019 (FY2020).

The move is expected to take place after the general elections, with April and May the months when the Lok Sabha (lower house of Parliament) elections usually take place. The merger will be pushed to the end of the second quarter of FY2020, which is towards the end of 2019.

Sources told Moneycontrol the government is buying more time to get a better valuation for the combined entity which will be formed by National Insurance, Oriental Insurance and United India Insurance.

Sources said the merger is not the top priority for the government at present.

“The idea is to have a better value for the larger entity. Consultants will be appointed at a much later stage so that the finer details of the merger between the insurers can be finalised. It is a complex arrangement and will take time to be completed,” said a senior official.

Finance minister Arun Jaitley announced in the FY2019 Budget in February 2018 the merger and the subsequent listing of the merged entity.

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