Four public sector general insurance companies – New India Assurance, Oriental Insurance Company, United India Insurance and National Insurance Company – have witnessed a 27% drop in their employee strength in the past four financial years.
Oriental Insurance Company’s employee strength has fallen sharply by 31% to 9,440 as on March 31 from 13,667 as on March 31, 2018, according to data revealed by the government in the Rajya Sabha.
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For National Insurance Company, the fall in employee strength was 29% to 9,569 at the end of FY22, from 13,440 at the end of FY18. United India Insurance also witnessed a 28% fall to 11,523 during the last four financial years.
New India Assurance, which is the only profit-making state-run general insurer and the market leader in the non-life insurance space, also witnessed its number of employees shrink by 22% to 13,929 as on March 31, 2022, from 17,880 as on March 31, 2018, according to the data.
Significantly, loss-making Oriental Insurance Company and National Insurance Company made no fresh appointments in the last four years. United India Insurance, which has also been making losses, hired only 20 people from FY19-FY22. New India Assurance recruited 1,197 people in the past four financial years.
“Except New India Assurance, no public sector general insurance company has gone for new recruitment because the finance ministry was not on board. New India is recruiting entry cadre officers because its financial strength is much better than others and the department of financial services (DFS) is not against the new recruitment. But DFS is not allowing the other companies to recruit because of their financial situations. And, nobody is recruiting development officers now, it has become a runoff cadre for New India Assurance also. So, the strength is getting reduced, only class 1 officers like administrative officers are getting recruited,” a senior official at a state-run general insurance company told FE, requesting anonymity.
“Those who have joined in 1980s are now retiring. For the last 5-6 years, there was no recruitment and vacancies are not being filled. Naturally, in all, there is more retirement and less induction,” the official said.
“The government is not doing enough to make public sector insurance companies profitable. State-run insurers should be able to recruit the right kind of people who can compete with the private sector peers and make their market shares grow and give better benefits to the policyholders. The state-run companies can do better than their private peers only if the government brings good incentivisation programmes for the existing employees, and more and more people get recruited,” said Bejon Kumar Misra, advisory committee member with insurance regulator Irdai. Notably, between FY19 and FY22, the collective market share of Oriental Insurance, United India and National Insurance fell 687 basis points to 19.47% in the country’s non-life insurance space from 26.34%. Only New India Assurance was able to increase market share by 70 bps during the period as it posted profits every year and its solvency ratio remained above the regulatory level.