Kolkata: As the non-life insurance
industry is witnessing growth in the last few years, public sector
general insurers sought capital infusion from the centre and are hopeful
that the central government would pay heed to their request in the
budgetary proposals, an official said on Friday.
"There is a huge requirement of capital by all the public sector (general insurance) companies. We have requested the government to infuse capital so that the companies can grow. We are hopeful that our request would be met," National Insurance Company's Chairman and Managing Director Tajinder Mukherjee said.
According to her, general insurance is highly capital intensive industry and for every Rs100 liability that it creates, there should be Rs 150 worth of assets to back it.
She said the industry experienced an "unprecedented growth" in the last few years as it witnessed CAGR growing around 16-17 in the last 5-7 years.
"As we want grow our business, capital has to be infused. With rise in premium, there is requirement of adequate capital to meet the regulatory standard," she said at a interactive session organised by Bharat Chamber of Commerce.
Mukherjee felt the government's proposal to merge three public sector general insurers- National Insurance Company, Oriental Insurance Company and United India Insurance - into a single insurance entity and subsequently list the entity would not be "restrictive" in terms of competition.
"It will make the merged entity a stronger company which will have more capacity. It is a government's call and we cannot give a time line and how it will happen and in what form," Mukherjee said.
She said the insurance industry in India consists of 63 companies, out of which 24 are in life insurance business and 39 are non-life insurers.