The Indian government could link financial support for three state-owned general insurance companies to their financial performance, after assessing their capital needs.
Fundraising or capital infusion into the companies — United India, National, and Oriental — could be options, but further fiscal support from the government will be linked to the companies showing profits, reported CNBC-TV18.
Sources indicate that high claims ratios, coupled with losses or low profitability, remain ongoing concerns that need to be addressed by the general insurance companies. The government has already instructed the insurers to scale back motor and health insurance businesses to reduce losses.
In the first quarter of the current financial year ending 31 March 2025, United India reported a loss of INR5,560m ($66.5m) with a solvency margin ratio of -0.73; National reported a loss of INR2,930m with a solvency ratio of 0.46; Oriental posted a profit of INR910m but had a solvency margin ratio of -1.03.
In previous years, the government pumped a total of INR175bn into the insurers.