Government-owned United India Insurance is looking to reorganise its business by consolidating its presence in some "loss-making" portfolios such as group health. It also aims to enhance focus on liabilities and fire segments.
The restructuring is likely to be completed over the next 12 months, and will help shore up profitability, Mr KB Vijay Srinivas, director and general manager of United India, told Hindu Business Line.
“We are in the process of reorganising our businesses by right-sizing some unwanted and loss-making portfolios such as group health where pricing has been under pressure. We are trying to create a portfolio which is profitable,” Mr Srinivas said.
For the year ended 31 March 2018 (FY2018), the general insurer reported a net profit ofINR10.03bn ($144m), compared to a loss of INR19.14bn in FY2017, backed by significantly lower underwriting losses. The underwriting losses fell by almost half to INR25.42bn in FY2018, compared to ?4,444 crore in FY17.
Its gross premium income, driven primarily by motor, health and crop, grew by 9% to INR174.30bn in FY2018.
“Liabilities and fire, put together, currently account for about 7% of our total business; we would expect it to increase to 12% in the next one to two years,” he said.
Apart from reorganising its business, the company is also looking into rationalisation of expenses to improve profitability. It is in the process of identifying loss-making branches.
“We have around 2,100 branches spread across the country. We have set up a team to study loss-making branches. We are trying to assess how to rationalise them,” he said.
When asked about the status of the talks to merge the three general insurance companies – National Insurance Company, United India and Oriental India Insurance – into a single entity, he said: “The background work is on; an advertisement has been floated to call for expression of interest for appointing a consultant to look into the process of merger.”