Kolkata - Three state-run general insurance companies -- United India Insurance Company, National Insurance Company (NIC) and Oriental Insurance Company -- are expected to meet on February 16 to initiate their proposed merger plan, an official said here on Tuesday.
The three companies are expecting the merger formalities would be completed before the vote on accounts next year.
"The merger is expected to be completed before the government presents the vote of account early next year. The chiefs of the three general insurance companies will have a departmental meeting on February 16 to discuss the Budget pronouncements," United India Insurance's CMD M. N. Sarma said on the sidelines of a health insurance summit organised by Assocham.
In his budget announcements, Union Finance Minister, Arun Jaitley proposed three public sector general insurance companies would be merged into a single insurance entity and would be subsequently listed.
Another PSU general insurer New India Assurance, the biggest among government-owned general insurers, had got listed in the bourses.
Elaborating on the merger, Sarma said that it would help insurers to consolidate their strengths.
"Like each one of us has 30 regional offices so total number is 90. But after merger we can keep only 30 offices so the merged entity can reduce costs significantly," he said.
Sarma also claimed there would be no retrenchment following the merger.
However, NIC's CMD K Sanath Kumar said the roadmap for the merger would be laid out by the government.
Incidentally, the combined gross direct premium underwritten of these three companies taken together was over Rs 40,000 crore by end of 2016-17.
The merging of the three state-run insurers will lead to the creation of a giant non-life company and it is expected to be a major contributor to the divestment target of Rs 80,000 crore set for the fiscal 2018-19.