Industry Odisha Bureau, Sep 02: The Finance Ministry has directed public sector general insurers to prioritise profitable business lines. This emphasis reflects a broader push to strengthen the financial performance of state-owned insurers. Department of Financial Services Secretary Sanjay Lohiya asked PSGICs to adopt suitable measures reducing incurred claim ratios significantly. The direction emerged from a performance review meeting covering underwriting performance across all business segments.
The secretary stressed that controlling incurred claim ratios is essential for underwriting sustainability and profitability. Lower claims pressure enables insurers to improve their overall underwriting economics and financial viability substantially. This requires discipline in policy selection, claims management and pricing across all insurance products. The approach signals the government’s commitment to ensuring public-sector insurers operate on sound financial foundations.
Technology adoption and accelerated digitalisation emerged as equally important priorities for public sector insurers. The ministry asked PSGICs to increase technology use while simultaneously optimising IT expenditure and digital spending. This dual emphasis reflects a need for efficiency rather than simply increasing digital budgets substantially. Better technology deployment can improve operational efficiency, reduce administrative costs and enhance customer experience proportionally.
The Finance Ministry emphasised improving customer communication and outreach across underserved segments and geographical areas. Public sector insurers should leverage social media and other platforms to enhance insurance-product awareness. This objective connects directly with the government’s broader goal of improving insurance penetration and density. Expanding coverage in underserved markets helps address the significant protection gaps affecting many Indian households today.
A standardised KPI framework across PSGICs represents a crucial accountability mechanism for performance monitoring. These KPIs should enable consistent and comparable financial and non-financial performance assessment across all companies. Quarterly reviews of these metrics will provide regular progress tracking and accountability for results achieved. This structured approach allows the government to measure improvement and identify areas needing stronger attention.
Customer grievance redressal remains an important dimension of strengthening public-sector insurer performance and credibility. The secretary advised PSGICs to ensure expeditious and quality resolution of customer complaints arising. Better grievance management improves customer trust and strengthens the reputation of state-owned insurance companies significantly. This focus complements the broader objective of expanding insurance access in underserved market segments systematically.
The performance review for financial year 2025-26 covered underwriting performance across all Lines of Business comprehensively. Executives from NICL, UIICL, OICL, AICIL and NIACL participated in the ministry’s review meeting. The direction reflects the government’s expectation that public-sector general insurers will strengthen operational and financial performance. The multi-dimensional approach addresses profitability, technology, customer outreach, market expansion and accountability simultaneously.
