As competition from the market-savvy private sector non-life insurance players intensifies, public sector non-life insurers are getting down to brass tacks and overhaul the way they function.
Following directions issued by the finance ministry, the four general insurers are in the process of appointing global consultants to completely transform their organisations to make them more proactive and enhance profitability.
The general insurers have sought well-crafted strategies from interested consultants to withstand competition from the private sector which is more customer-oriented in terms of both services and products.
The Mumbai-based New India Assurance Company, the largest of them all, wants the prospective consultant to suggest plans to actually enhance its market share through overhaul of product development, marketing, distribution and a complete restructuring of the organisation.
Meanwhile, the New Delhi-based Oriental Insurance Company has clearly specified that it wants to implement a plan that would not only prepare it for competition but also to face challenges from newer trends in the non-life insurance landscape. The newer trends include serious competition from life insurance companies in the health insurance segment.
Kolkata-based National Insurance Company and Chennai-based United India Insurance Company too have called for expressions of interest from global consulting firms.
M K Garg, chairman and managing director of United India, said, "It's an operational exercise. Last month, we invited bids from management consultants and by the end of the month we will be selecting the consultant."
Private sector general insurers are increasing their market share on the basis of retail business. They have also made extensive use of information technology, facilitating faster turnaround time.
"The PSU insurers are still grappling with a workforce which is unionised. Policies relating to transfers, promotions and risk versus rewards are not clear," said V Ramakrishna, CEO of India Insure, an insurance broker.
"The principle difference between public and private sector insurers is the turn around time in claims settlement. The government insurers are still handicapped with the fear of audit queries from multiple audits such as internal audit, external audit, central government audit and vigilance audit as a result of which they need to take extra care at each level to verify claims resulting in delayed settlement of claims. On the other hand, a private insurer has a central claims department which facilitates quick decision making," he said.
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