New Delhi, May 28 (PTI) Finance Minister Nirmala Sitarman on Wednesday reviewed the financial performance of public sector general insurance companies and asked them to avail the Artificial Intelligence (AI) for the quick addresses of customers with better risk evaluation.
The Finance Ministry said in a statement, during the review, the Finance Minister emphasized the immediate need for digital changes in all public sector insurance companies (PSGICS) to improve service distribution and efficiency.
In this, adopting the AI-operated claim settlement system, especially for motor’s own loss and health insurance products, to ensure rapid and more accurate claim resolutions.
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Sithraman instructed companies to develop innovative insurance products to suit new and emerging risks, including cyber fraud, and to diversify their product portfolio to develop consumer needs.
The importance of strong underwriting practices and portfolio optimization was also revealed, with instructions to align the joint ratio with the global industry benchmark to the protection of profitability and financial stability.
Customer-focusedness was identified as a core focus field and the minister urged PSGICS to immediately address the customer complaints, strengthen social media engagement, and ensure easy integration with account aggregator systems, including end-to-end digital, which know your customer (KYC) processes.
These measures are designed to simplify onboarding and improve customer experience.
To expand the market access and strengthen the service access, PSGIC was encouraged to carry forward strategic cooperation with mediators, fintech and Insurtech firms.
Emphasizing the importance of taking advantage of advanced data analytics and artificial intelligence, he said, they can help develop accurate pricing models and efficient claims, which are essential for better risk evaluation and long -term stability.
The Finance Minister asked PSGICs to apply these directions from time to time and directed that regular reviews should be made to monitor the progress and ensure the achievement of the desired results, it said.
During the meeting, in which senior officials of the Financial Services Department and senior officials of the CEO of PSGICS participated, the Finance Minister reviewed the major performance indicators including premium collection, insurance entry and density, and ratios of claims made.
It was noted that the total premium collected by PSGICS saw a significant increase with a significant increase in about Rs 80,000 crore in 2019, about Rs 1.06 lakh crore in 2025.
While the general insurance entry in India is less than 1 percent of GDP – 2023 compared to the global average 4.2 percent – insurance density has continued to improve.
The Finance Minister underlined the requirement of PSGIC to improve both penetration and density to ensure comprehensive financial security during the meeting.
Officers led by DFS Secretary M Nagaraju also presented a five -year analysis of the health insurance section, which showed a continuous premium increase in private insurers, Standalone Health Insurance (SAHI) and PSGIC.
The ratio of claims made, which were at the peak during the Covid -19 epidemic in FY1 21 (PSGICS at 126 percent and private insurers at 105 percent), have come down since.
By FY24, these ratios operated 103 percent for PSGIC, 89 percent for private insurers and 65 percent for sahi.
PSGIC has seen a significant change with all that have become profitable again. While Oriental Insurance Company Limited (OICL) and National Insurance Company Limited (NICL) started making quarterly profits from Q4 and FY25 Q2 of FY24 respectively, United India Insurance Company Limited (UIICL) posted benefits in FY25 after 7 years.
In particular, the New India Assurance Company Limited (NIACL) has consistently maintained his position as a market leader and is earning regular profits.
The management of the Agricultural Insurance Company of India’s General Insurance Corporation (Revenue) and Bharat Limited was also present. PTI DP DRR
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