The shares of General Insurance Corporation of India Ltd. (GIC Re) rallied 10% on the bourses today to hit their day’s high of Rs 175.90. The stock has gone up over 20% in the previous two trading sessions. The six-month performance has been impressive as well. It has generated an attractive return of 57% for its investors during the period.
General Insurance Corp. is a central public sector company under the Ministry of Finance, Government of India. It was incorporated in November 1972 and is the largest reinsurance company with a 64% market share. The rise in the share price of GIC Re comes on the back of the Central government mulling over a possible merger of the four public sector general insurance companies with the Life Insurance Corporation (LIC) of India.
A senior insurance industry commented, “Finance Minister Nirmala Sitharaman had earlier announced that in the case of strategic sectors, there can be four public sector units and in the case of non-strategic sectors, there will be only one government-owned unit.” The official further noted, “In line with that announcement, the government can merge its four non-life insurance companies with LIC.”
A report highlighted that the employee unions in the four government-owned general insurance companies have been pressing for the merger. The unions are from The Oriental Insurance Company Limited, National Insurance Company Limited, The New India Assurance Company Limited, and United India Insurance Company Limited.
General Insurance Corporation of India (GIC Re), ECGC, and Agriculture Insurance Company of India are other insurance companies owned by the government. Some time back the government had announced that it would likely merge Oriental Insurance, National Insurance, and United India. However, the idea was tabled and no development was made on that front.
Written by Vikalp Mishra
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