State-owned insurance cos jointly bid for A-I account

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New Delhi, July 6: In wake of stiff competition from the private sector players, all four state-owned general insurance companies have decided to jointly bear the Rs 60 crore Air-India insurance account. The companies — New India Assurance, Oriental Insurance, National Insurance and United India Insurance — have made a joint presentation to the civil aviation ministry to this effect. At present, the Air-India account is with New India Assurance.

However, the proportion of the split in the insured amount is yet to be worked out. “We are yet to settle the issue, though more or less it (the insured amount) would be divided equally,” a source said. It is learnt that this is the first time all the players have jointly bid for an account.

Earlier, the civil aviation ministry had also invited bids from private players alongwith the four public sector companies for the renewal of the Air-India insurance account, effective from July 1.

The civil aviation ministrty awarded the Indian Airlines account to the Oriental Insurance, in October last year, on the ground that the insurance accounts of state-owned carriers should be based on rotation. Sources added that in the future there could be more joint biddings for insurance accounts. “The idea is not to eat into each other’s market-share and weaken ourselves. Instead, this gives all the companies an opportunity to strengthen the insurance pie, especially in the midst of tough competition,” the source added.

Meanwhile, private low cost carrier SpiceJet has awarded its insurance account to Oriental Insurance. The company is also expecting to bag accounts of other airlines like Paramount and AirOne.