Three state-owned general insurers in India – National Insurance, United India Insurance and Oriental Insurance – are reportedly under pressure on multiple fronts, with the future being very uncertain for these companies.

The Delhi high court’s order to set aside the appointment of directors by the Banks Board Bureau (BBB) due to issues on jurisdiction has also affected the appointment of the insurers’ chief executives, the Times of India reported. Erosion of capital has made it difficult for the insurers to grow their businesses and implement overdue wage hikes for their employees.

Furthermore, the government’s announcement that it wants to privatise the insurers despite pending merger plans has piled on the uncertainty.

The BBB has recommended appointing Inderjeet Singh as chairman and managing director of United India Insurance and Suchita Gupta to the same role at National Insurance. Earlier, Anjan Dey was tapped to lead Oriental Insurance. However, the Delhi high court ruled to set aside these appointments.

The merger process, first announced in January 2020, was put on hold after the COVID-19 pandemic broke out. However, in the budget speech for FY 22, Finance Minister Nirmala Sitharaman said that the government seeks to privatise one general insurance company and two banks.

Financial difficulties have also beset the insurers, with all three’s solvency ratios dipping below mandated levels. According to the report, the government’s ownership is the only thing keeping these businesses afloat.

“Senior officials in the industry feel that, given the state of finances and liabilities, it is unlikely that the government would be able to privatise any company,” the report said. “A merged entity, too, would not be strong. The only feasible option might be to transfer the operations to New India Assurance.”