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Is the central government moving towards merging its four general insurance companies into one?


The question pops up as the four general insurers have decided to restructure the organisation towards profitable growth and have called for Request for Proposal (RFP) from consultancy firms.

The assignment is called "Organisational Efficiencies and Performance Management in Public Sector General Insurance Companies."

The four insurers are: The Oriental Insurance Company Limited, National Insurance Company Limited, The New India Assurance Company Limited and United India Insurance Company Limited.

Of the four, The New India Assurance is listed in the stock exchanges.

As per the tender, the companies are calling for one consultant for the assignment which is logical as the process, human resource policies and procedures are uniform in the four companies, a senior industry official told IANS.

Though the central government did not proceed further on its earlier announcement to merge the three unlisted non-life insurers- The Oriental Insurance, National Insurance and United India Insurance- or to privatise one of the three.

Given this, the current move seems to be the logical step towards that, say senior industry officials.

Further, the employees in the four companies also demand the same.

According to a senior industry official, the privatisation move is still on the cards and merger is not in consideration of the government.

Be that as it may, as per the RFP, the four companies are undergoing a transformative journey for the last two years with successfully running on the path to profitable growth and efficiencies, optimisation.

"This, being the third year, is earmarked for Organisational Efficiencies."

Accordingly, there is a proposal for restructuring the organisation to bring in profitable growth and employee development through Performance Management and Capability
Management, in alignment with the key performance indicators (KPI) devised the public sector general insurance companies.

The four companies have found a need for a consultant who could quickly absorb itself into this journey of ongoing reforms and permeate them into each and every branch and staff by designing, handholding and successfully implementing the process of such transition through organisational restructuring, performance management and its real-time measurement, allocation of specific roles and responsibilities as well as performance indicators for sales, non-sales and support staff, capacity and capability building and carefully crafted change management approach.

As on 31.03.2022, the four insurers together have procured a total premium of Rs.75,116 crore with a market share of around 34 per cent.

The total employees' strength is around 44,743 spread over 6,759 offices.

The expected duration of the proposed assignment for the selected consultants is 10 months, with a provision for extension, if required on existing terms.

As per the RFP, the scope of work involves organisational restructuring that is irreversible providing for digitally enabled workflows to convert operating offices into customer experience and business development centres while centralising underwriting/claims/accounts and others into the Regional Hubs;

- activate all three key channels for retail business growth namely, Agency, Bancassurance and Alternative channels through suitable sales management, incentives and rewards processes;

- create/shift large corporate businesses (both direct and broker-driven) at select6-8 locations, directly reporting to the Head Office.

- provide capacity planning framework through manpower redistribution for both Business Development (BD) and Non-BD roles, with a clear focus on retail business through pre-underwritten products and simplified processes;

- provide a comprehensive reskilling/up - skilling and capability building framework for BD, Non-BD, large corporate and vertical teams to cope with the above restructuring in a confident and motivated manner;

- handhold the insurers in implementing the new organisation structure across functions and geographies by providing carefully designed and sensitively implemented change management approach and communication framework;

- designing objective and quantifiable KPIs for each unique role along with their measurable outcomes and its integration with the performance appraisal system for each PSGIC to achieve y-o-y milestones;

- based on the above KPIs, creating performance dashboards for each sales and non-sales staff at the Operating Offices, Regional Offices and Head Office as well as across functions linked with the core system.

While the majority of the work is centered around a common approach for all the four insurers, the implementation shall happen at individual company level.

"Broadly, 80 per cent of the proposed assignment shall be allocated towards creating unified/common strategies/methodology and frameworks while 20 per cent of the proposed assignment will be allocated towards customising and rolling them out at individual company level," the RFP said.

Interested consultancy firms should submit their proposals to the Chief Executive, General Insurers' (Public Sector) Association of India (GIPSA), the coordinating body for the project.