An M&A committee has been formed by three state-owned general insurers that are facing a merger and subsequent listing.
The government announced the merger plan in its Budget on 28 February, involving National Insurance, United India Insurance and Oriental Insurance.
The decision to form a committee, the first step towards the merger, was taken during a meeting a few weeks agoamong the Finance Ministry with the heads of the three insurers. The committee's first meeting will take place soon, reports Business Standard.
Though the modalities are likely to be finalised by the end of this financial year which began on 1 April, the merger may be pushed to the next financial year.
The panel members will work out ways to manage a workforce of 42,000 employees. Issues like products, fund management, office integration, and maintaining brand quality are the other aspects that will be discussed.
At the end of March 2017, the solvency ratio of National Insurance was 1.90; Oriental Insurance, 1.11 and United India Insurance, 1.15. The mandatory minimum solvency requirement is 1.50.