The government’s proposal to merge National Insurance, United India Insurance and Oriental India Insurance can have massive ramifications as the merged entity will end up controlling about one-third of the total non-life insurance market in India. Will the combined entity be just old wine in a new bottle or will it be the breakthrough that becomes a game changer?
Apart from the prospect of improved valuation and safeguarding investor interest, what probably motivated the government to announce this merger was a combination of the deteriorating financial condition of the three companies, concerns around raising capital from the market and the divestment agenda of the government.
