Weak PSU insurers may get fresh capital in budget

Govt may allocate ₹4,000-5,000 crore to help general insurers meet solvency rules

- Subhash Narayan & Rhik Kundu

NEW DELHI: The government may infuse fresh capital into its loss-making general insurers in the next financial year to strengthen their operations and help them meet regulatory requirements, two people aware of the plans said.

The Union budget may allocate fresh capital for these insurers after reassessing their quarterly parameters in the nine-month period ending December 2024, the people said on the condition of anonymity.

At three of the weak state-owned general insurers, solvency ratio—a key requirement for insurers to continue servicing their customers—is expected to turn positive after the capital infusion. Solvency ratios at National Insurance, United Insurance and Oriental Insurance stood at -0.45, -0.59, and -1.06 at the end of FY24, against the minimum required 1.5.