India's state-run general insurers will have to submit board-approved turnaround plans to the government, setting out how they will scale back or exit unprofitable business segments, The Economic Times reported on Monday, citing people familiar with the development. The government aims to evaluate the four public-sector general insurers against a time-bound roadmap for reaching solvency on their own earnings, rather than through repeated support.
Source: The Economic Times
The push follows mounting losses across the sector. New India Assurance, the largest state-owned general insurer and the only one of the four to have stayed profitable, last week reported a net loss of Rs 1,267 crore in the September quarter (Q2 of FY27), against a net profit of Rs 63 crore a year ago. It had already posted a loss of Rs 256 crore in the first quarter.
Source: Informist Media
"This second quarter has been one of the most challenging quarters for the company in recent times," New India Assurance chairman and managing director Lavanya R. Mundayur said as the results were released. The company's underwriting loss widened to Rs 5,237 crore in the quarter from Rs 3,554 crore a year earlier, as claims rose in the property, motor and health segments, and gross written premium grew only about 5.2 per cent to Rs 11,083 crore.
Source: ET Bureau via TradingView
New India also set aside an additional Rs 715 crore in its motor third-party portfolio after a Supreme Court verdict recognising the economic value of unpaid domestic work by homemakers in compensation claims. Its solvency ratio stood at 1.61 times at the end of September, above the regulatory control level of 1.5 times.
Source: Asia Insurance Post
The other three state-run insurers — Oriental Insurance, United India Insurance and National Insurance — have solvency ratios below the norms prescribed by the insurance regulator IRDAI, according to the report. Executives cited by the paper said the companies will be judged on roadmap parameters that include underwriting capacity, technology upgrades and organisational restructuring, alongside better pricing, oversight and structured reinsurance for risky lines of business.
In August, a parliamentary standing committee had recommended that the government prepare a time-bound roadmap for the state-run insurers to achieve organic solvency and move away from reliance on accounting adjustments or emergency capital infusions. The committee also suggested wider use of AI-powered assessments and digital inspections in motor and property insurance to curb losses from fraudulent claims.
In September, the government reviewed the financial and business performance of the state-owned general insurers for FY26, and the finance ministry asked them to focus on profitable lines of business and bring down their incurred claim ratio. The board-approved plans sought now are the next step in that review process; the reports did not give a deadline for submission.