To improve the financial health of state-run general insurers before initiating their consolidation the government may need to shell out close to Rs 13,000 crore.
The government is exploring various consolidation options, including the merger of state-run general insurance companies with New India Assurance Company Ltd., to create synergy and unlock value.
The Department of Investment and Public Asset Management, under the Ministry of Finance, is also looking at other options including stake sale in three state-run insurance firms, National Insurance Company Ltd., Oriental Insurance Company Ltd., and United India Insurance Company Ltd.
The Centre, in budget 2018-19, had announced that the three companies would be merged into a single insurance entity. The process of merger could not be completed due to various reasons, including the poor financial health of these companies. 
The consolidation in the public sector general insurance companies is part of the government’s disinvestment strategy.
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