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‘Public sector general insurance companies should rationalize branches and cut expenses’ – ‘public sector general insurance companies should rationalize branches and cut expenses’

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‘Public sector general insurance companies should rationalize branches and cut expenses’ – ‘public sector general insurance companies should rationalize branches and cut expenses’

New Delhi, Oct 14 (PTI) The Finance Ministry has asked public sector general insurance companies to rationalize branches and cut non-essential expenses to improve their financial position.

Of the four public sector general insurance companies, National Insurance, Oriental Insurance and United India Insurance are making losses. New India Assurance stands out in this category.

This advisory of the ministry has been issued after Parliament’s approval of a bill related to privatization of government-run general insurance companies in August in line with the budget announcement.

Sources said the finance ministry has asked these companies to rationalize branches and reduce administrative layers wherever possible.

In addition, sources said that they have been asked to expand their business through affordable digital medium.

K Govindan, general secretary, All India General Insurance Employees Association, said, “Public sector general insurance companies are implementing various government schemes. The rationalization of branches should not cause hardship to the poor as they may have to travel long distances to settle their small claims, for example animal insurance or crop insurance.

He said that the association as a stakeholder has taken up these issues with the management of various companies.

He said that there should be a branch in each district headquarter so that the poor do not face any problem.

Significantly, Finance Minister Nirmala Sitharaman had announced a major privatization agenda in the budget for 2021-22, which includes privatization of two public sector banks and a general insurance company.

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