Govt weighs ₹5,000 crore aid for three PSU insurers

The funding is aimed at stabilizing balance sheets of the loss-making public sector insurers

- Subhash Narayan

The Centre is considering a fresh capital infusion of up to ₹5,000 crore into three loss-making and financially weak public sector general insurers—United India Insurance Co. (UIC), National Insurance Co. (NIC) and Oriental Insurance Co. (OIC), according to two people aware of the discussions.

The move follows a brief earnings turnaround last year that failed to translate into sustained balance-sheet repair.

The proposal, which could be routed through a second supplementary demand for grants this fiscal or the Union Budget for FY27, the people said, revives a plan that was deferred in the past two budgets after the insurers reported short-lived quarterly profits.

‘The proposed funding is aimed at stabilizing the balance sheets of the insurers, restoring their solvency margins and preparing them for a long-delayed consolidation and potential sale plan, one of the two people quoted above said.

The government wants the entities to be adequately capitalized before executing structural reforms such as mergers, listing or privatization, this person added.