CAG report: PSU general insurers logged ₹26k cr loss between FY17 & FY21

All four public sector general insurers posted an aggregate loss of ₹26,364 crore between 2016-17 and 2020-21, according to an audit report by the Comptroller and Auditor General of India (CAG).

The losses of health insurance business of PSU insurers either wiped out or decreased profits of other lines of business or increased the overall losses, the audit report on third-party administrators (TPAs) in the health insurance business of public sector insurance companies noted.

“The losses were on account of group health insurance policies where premium charged was less and claim outgo was more in comparison to retail policies,” it said, adding that PSU insurers’ market share in health insurance business is also reducing vis-a-vis the stand-alone health insurers and private insurers.

The audit findings tabled in parliament on Friday pointed out that the four insurers- New India Assurance, United India Insurance, Oriental Insurance and National Insurance – did not comply with the government directive to not exceed above 95% the combined ratio of standalone group policies and 100% for group policies involving cross subsidy.