Public sector general insurance companies now have an annual 'insurance manthan' or retreat to look into the issues plaguing the sector. The event was held on 5-6 October.
Financial services secretary Rajeev Kumar said in a tweet that this initiative is to develop comprehensive reform agenda in six themes to modernise public sector general insurance companies, reports Moneycontrol.
The six-point agenda discussed included: a fully insured society, customer orientation, digital and analytics for future, sustainable and prudent business, reach for everyone and talent management.
Among the state owned insurers, New India Assurance and reinsurer GIC Re are listed on the stock exchange. Others including Oriental Insurance, United India Insurance and National Insurance are unlisted.
Underwriting losses stay high
The underwriting losses of public sector insurers increased by 43.9% to INR155.910bn in the fiscal year ended 31 March 2017 (FY2017), from INR108.35bn in FY2016.
The Finance Ministry has warned state owned general insurers to improve their underwriting performance and not focus solely on investment income.
In categories like group health insurance, the combined ratios have crossed 130%. This is primarily because state owned insurers price products aggressively to retain large clients.
Since 2015, the Finance Ministry has held an annual two-day retreat for banks and financial institutions, to take forward the government’s commitment to reforms in the financial sector.
From 2017, the event was rechristened 'PSB Manthan' where senior public sector bank officials meet in Gurugram to discuss and brainstorm the banking sector’s troubles and focus on improvement in credit growth and reducing non-performing assets.
With its own "manthan", the public sector insurance sector can address more closely a series of problems including high underwriting losses and lack of young talent. On the technology front too, private insurers are ahead of their public sector peers, be it in policy issuance, servicing or claims settlement. A senior executive said that another focus is on bringing the uninsured under the various social sector schemes of the government.