Finance Ministry pushes PSU general insurers to focus on profitable business, rein in claim ratios

New Delhi: The Finance Ministry has asked public sector general insurance companies to sharpen their focus on profitable business segments and take steps to reduce incurred claim ratios, as the government pushes state-owned insurers to strengthen their underwriting and operational performance.

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The direction came during a performance review meeting chaired by Department of Financial Services (DFS) Secretary Sanjay Lohiya on Wednesday, where the financial and business performance of public sector general insurance companies (PSGICs) for FY2025-26 was assessed.

According to a Finance Ministry statement, Lohiya advised the insurers to strengthen their focus on profitable lines of business and adopt appropriate measures to bring down incurred claim ratios — a key indicator of the proportion of premium income being consumed by claims.

The review covered underwriting performance across different lines of business, key performance indicators (KPIs), digital initiatives and other operational issues.

The ministry also pushed the insurers to make greater use of technology and accelerate digitalisation, while ensuring that spending on information technology and other digital initiatives is optimised.

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Lohiya called for a stronger and standardised KPI framework across PSU general insurers to enable consistent and comparable assessment of both financial and non-financial performance. These indicators should be reviewed every quarter, he said.

Customer acquisition and outreach were another focus of the meeting. The DFS secretary asked insurers to improve communication and publicity, including through social media and other platforms, to increase awareness about insurance products and expand their presence in underserved segments and regions.

The companies were also advised to work towards improving insurance penetration and density and reducing protection gaps.

At the same time, Lohiya stressed the need for faster and quality resolution of customer grievances, making servicing standards another parameter in the government's assessment of PSU insurers.

The meeting was attended by senior executives of the state-owned general insurers, including NICL CMD Rajeshwari Singh Muni, UIICL CMD Bhupesh S Rahul, OICL CMD Sanjay Joshi, AICIL CMD Lavanya R Mundayur and NIACL Executive Director S Sivasankar.

DFS Additional Secretary Debasish Prusty and other senior officials of the department also attended the review meeting.

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