Up to 15,000 jobs at risk from Indian insurer merger
The long-discussed merger between National Insurance Company, Oriental Insurance Company and United India Insurance Company will be good and bad news.
While it create the largest non-life insurance company in India and save millions of dollars, it will lead to an estimated 10,000 to 15,000 job losses.
Reports state that the Indian government is planning to speed up the merger of the three state-owned general insurance companies, as part of a major divestment across several sectors.
The three insurers compete with one another, which India’s finance ministry feels is unnecessary and a waste of resources. The major challenge it has are employees at the insurance companies who are highly organised and have strong union presence.
Another challenge are the vastly different systems and IT platforms between the companies which may eat into the cost savings when integrated.
India’s economy expanded at its weakest pace in more than six years in the quarter to September at 4.7%, a Reuters poll showed. It needs to grow at around 8% to create enough jobs for its millions of young people joining the labour force each year.