On May 28, 2025, Union Minister for Finance and Corporate Affairs, Smt. Nirmala Sitharaman, chaired a pivotal review meeting of Public Sector General Insurance Companies (PSGICs) in New Delhi. The meeting focused on enhancing the performance of PSGICs, including New India Assurance, United India Insurance, Oriental Insurance, National Insurance, General Insurance Corporation of India, and Agriculture Insurance Company of India Limited.
Performance Highlights of PSGICs
Significant Growth in Premium Collections
The review highlighted a remarkable increase in premium collections by PSGICs, rising from ₹80,000 crore in 2019 to ₹1.06 lakh crore in 2025. The broader general insurance industry also reported robust growth, with total premium collections reaching ₹3.07 lakh crore in FY 2024–25. However, India’s insurance penetration remains low at 1% of GDP, compared to the global average of 4.2% in 2023. Insurance density has improved, increasing from $9 in 2019 to $25 in 2023, signaling progress in financial inclusion.
A five-year analysis of the health insurance segment showed consistent premium growth across PSGICs, private insurers, and standalone health insurers (SAHI). The incurred claims ratio, which peaked during the COVID-19 pandemic in FY21 (126% for PSGICs, 105% for private insurers), moderated to 103% for PSGICs, 89% for private insurers, and 65% for SAHI by FY24, reflecting improved financial stability.
Financial Turnaround of PSGICs
Profitability Achievements
All PSGICs have achieved a significant financial turnaround. Key highlights include:
- New India Assurance Company Ltd. (NIACL): Consistently profitable and a market leader.
- Oriental Insurance Company Ltd. (OICL): Posted quarterly profits from Q4 FY 2023-24.
- National Insurance Company Ltd. (NICL): Recorded profits from Q2 FY 2024-25.
- United India Insurance Company Ltd. (UIICL): Achieved profitability in Q3 FY 2024-25 after seven years.
These achievements underscore the growing financial resilience of PSGICs, a critical point for exam-related questions on public sector enterprises.
Key Directives from the Finance Minister
Focus on Innovation and Digital Transformation
Smt. Nirmala Sitharaman issued several directives to strengthen PSGICs:
| Directive | Description |
|---|---|
| Digital Transformation | Adopt AI-driven claim settlement systems for motor and health insurance to enhance efficiency. |
| Innovative Products | Develop insurance products for emerging risks like cyber fraud and diversify portfolios. |
| Customer-Centricity | Address grievances promptly, enhance social media engagement, and integrate with the Account Aggregator system for digital KYC. |
| Strategic Collaborations | Partner with fintechs and insurtechs to expand market reach and penetration. |
| Data Analytics | Leverage advanced data analytics and AI for precise pricing and claims modeling. |
These measures aim to align PSGICs with global benchmarks, ensuring profitability and customer satisfaction.
Key Highlights:
- Union Finance Minister Smt. Nirmala Sitharaman reviewed PSGICs on May 28, 2025, in New Delhi.
- PSGIC premium collections rose from ₹80,000 crore in 2019 to ₹1.06 lakh crore in 2025.
- Insurance penetration in India is 1% of GDP, with insurance density at $25 in 2023.
- All PSGICs achieved profitability, with NIACL as the market leader.
- Directives include digital transformation, innovative products for risks like cyber fraud, and partnerships with fintechs.