The Hindu Business Line : Public insurers put on hold promotions

THE four public sector general insurance companies have put on hold promotions of all their middle management cadre. The decision follows a suggestion by the Union Ministry of Finance.

Sources said the Ministry had suggested to the four general insurers that the elevations be deferred till such time the report of the consultants for restructuring the companies is submitted. AF Ferguson & Co, which had been appointed as the consultant, is expected to submit its report only later this year.

The four insurers — New India Assurance Company Ltd, National Insurance Company Ltd, United India Insurance Company Ltd and Oriental Insurance Company Ltd — have just completed the second round of the Voluntary Retirement Scheme.

The vacancies created by the exit of a large number of officers in the middle management cadre were expected to be filled through promotions. At least 34 per cent of the 13,500 officer cadre had exited through the VRS. Most of the exits were from highly skilled technical pools. However, with the delay in the consultant's report, the vacancies are likely to result in further shrinking of business volumes and a loss of market share to the private sector, which has increased its market share to 15 per cent.

But what worries some of the top managements is that the loss of business to the private sector had mostly been in low-loss portfolios.

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