India’s Finance Ministry is reassessing whether combining three state-owned general insurers would yield operational benefits and strengthen competitive positioning. The preliminary evaluation centres on Oriental Insurance, National Insurance, and United India Insurance, each of which received substantial government capital support totalling Rs 17,450 crore over the period from 2019-20 through 2021-22.
The discussion represents a return to earlier structural reform discussions that have been postponed multiple times. When the 2018-19 Budget was presented, then-Finance Minister Arun Jaitley indicated that the three companies would be integrated into a unified entity. However, in mid-2020, the government altered its approach and allocated Rs 12,450 crore in capital rather than pursuing the merger.
With improved balance sheets at the three public insurers, the Finance Ministry has commenced assessment of whether a consolidation would deliver enhanced operational efficiency and expanded market presence, according to individuals with knowledge of the discussions, as reported by The Economic Times. The evaluation takes place within a broader context of insurance sector regulatory evolution.
Parliament approved the General Insurance Business (Nationalisation) Amendment Act in August 2021, modifying the framework for state-owned insurers. The legislative changes eliminated previous provisions requiring the central government to retain a minimum 51% equity position in specified insurers. These amendments were designed to encourage private sector participation within public insurance entities and advance objectives including expanded insurance penetration and enhanced social protection mechanisms.
Concurrently, the Finance Ministry is reviewing options for privatising a general insurance company. Such an action would align with announcements made during the 2021-22 Budget, when the government signalled intentions to privatise two public sector banks alongside one general insurance company. Individuals close to the process indicated that multiple approaches are under consideration, although no final determinations have been made.
Foreign investment expansion also remains under government review. Legislation expected to be introduced during the Winter parliamentary session seeks to expand the foreign direct investment ceiling in insurance operations from 74% to 100%. The Winter session runs from Dec. 1 through Dec. 19, incorporating 15 working days.
The timing of these policy reviews coincides with expanded activity in India’s non-life insurance markets. According to research by CARE Ratings, gross premium collections in September 2025 totalled Rs 31,117.6 crore, representing a 13.2% annual increase. This performance reversed a 6.5% contraction recorded in the same month one year prior and exceeded the 1.6% growth recorded in August 2025.
Growth was distributed across several segments. Core business lines including motor, crop, fire, and engineering insurance drove renewals, while specialised coverage and personal accident products experienced increased demand. Public sector general insurers contributed through consistent renewal activity across fire, engineering, health, and motor third-party segments.
Private non-life operators, encompassing standalone health insurers, commanded 60% market share during September 2025, a decline from 66% year-on-year. Year-to-date metrics showed private players controlling 63.8% of overall market share, with public sector insurers expanding their combined position to 31.7%.
