The proposed merger of the three government-owned general insurance companies--National Insurance, United India Insurance and Oriental Insurance--is likely to be completed by early next year.
The merger of the non-life insurers was announced on 1 February in the Budget for 2018-19. The merged entity will subsequently be listed on stock exchanges.
Mr MN Sarma, Chairman and Managing Director of United India Insurance, said yesterday that the heads of the three general insurers will meet on Friday to discuss the merger, reported Press Trust of India.
"We hope to have some roadmap on merger and health insurance scheme in the meeting. We expect the merger to be completed before the next vote on accounts," he said.
The profitability and solvency ratio of some general insurance companies including the state-owned ones, have been under pressure owing to underwriting losses.
S&P Global Ratings said in a report that the merger proposal should reduce competition and facilitate improved underwriting discipline in the domestic market.
The three insurers together contribute around 30% of the non-life-insurance market in India, with a premium book of more than INR400 billion (US$6.2 billion).
"A merger of three big public insurers in India will improve the sector's overall profitability by reducing competition. In our view, less competition will facilitate improved underwriting discipline, enhanced risk retention, and better managed solvency levels in the Indian insurance market," S&P Global Ratings credit analyst Trupti Kulkarni said.