In a recent note to the ministry of finance detailing its state of preparedness for facing competition from the private sector, GIC has said that gradual disinvestment is necessary for providing a level playing field to state-owned companies which have to take commercially-sound decisions in a competitive environment.

"Discussions for disinvestment along with other restructuring measures have been initiated by the top management with the concerned parties and an action plan with a specific timeframe will be presented to the board", the GIC note said. It added that it was now necessary for the organisation tocontinuously scan the emerging scenario and initiate steps to meet the challenges, including organisational restructuring and diversification into new product lines and markets. Among other preparatory steps for an organisational restructuring, GIC has favoured a reduction of layers, very selective expansion of offices and rationalisation of branches among the four subsidiaries. To usher in a new management ethos, GIC has drawn up plans for productivity-linked wages and reward systems, a result-oriented working atmosphere by enforcing accountability, redeployment of surplus staff, and the containment of multiplicity of unions with better conflict management.

GIC has also sought government approval to set up an internal system of preventive vigilance and internal audit. Currently, the annual audit of the general insurance companies is conducted by the office of the comptroller and auditor-general. The companies' vigilance officers are being deputed from outside the organisation.

In redefining the marketthrust, GIC has been emphatic on research and development, product upgradation, and product reviews vis-a-vis organisation and customer needs. Other steps include seeking customer feedback on a regular basis, reinforcing distribution and retailing channels, and entering into new markets like managed healthcare, retail banking and agricultural insurance. For improving customer focus, the institution is planning to launch internet marketing, and invigorating the internal systems and monitoring mechanisms. As a part of cost control, GIC has taken measures to reduce the intake of additional manpower, redeployment of surplus manpower and value-addition to jobs. In view of the ensuing competition, the apex general insurance body is taking a series of steps to grant functional autonomy to its subsidiaries in all matters. In preparation for the coming competition, GIC has indicated that it expects to lose some of its existing business to competitors.