Merger deferred as 3 PSU insurers return to profits

The government has deferred plans to merge or privatize three public sector general insurance companies to FY27 after they posted profits, people familiar with the matter said, giving them time to notch up sustained profitability.

- Subhash Narayan & Rhik Kundu

The three companies—United India Insurance Co. Ltd, Oriental Insurance Co. Ltd and National Insurance Co. Ltd—are the weaker of the four state-owned general insurers. But they posted profits in the first nine months of FY25, a turnaround after years of losses.

United India reported profits of ₹27.45 crore, Oriental Insurance ₹368.37 crore and National Insurance ₹29.46 crore in the period. The fourth company, New India Assurance, is the stronger of the quartet.

All three have been told to focus on profitability rather than revenue growth as the government sets out to monitor their performance for a possible decision next year.

If the insurers remain profitable through FY26, options such as a merger or even privatization may be revisited, the people mentioned above said. A potential merger could involve the integration of the three entities and their subsequent amalgamation with the stronger New India Assurance.