The government has proposed to merge three public sector general insurance companies — National Insurance Company, Oriental Insurance Company and United India Insurance Company.
Based on the bid floated in June, the firms zeroed in on EY as the consultant to advise on the consolidation process, sources said.
As on March 31, 2017, the three companies together had more than 200 insurance products with a total premium of Rs 41,461 crore and a market share of around 35 per cent.
Their combined net worth is Rs 9,243 crore with total employee strength of around 44,000 spread over 6,000 offices.
The consultant is expected to advise on organisational restructuring, rationalisation of human resources, management of operational issues, regulatory and compliance issues, sources said.
It is also expected to handhold the management of the three companies, throughout the merger process till the new organisation is formed and set in place, sources added.
Finance Minister Arun Jaitley in the Budget speech had announced that the three companies would be merged into a single insurance entity. The process of merger is likely to be completed during the current fiscal.
The profitability of many general insurance companies including the state-owned ones has been under pressure owing to rising underwriting losses and higher claims.
In 2017, state-owned New India Assurance Company and General Insurance Corporation of India were listed on bourses.
Initial estimates suggest that the combined entity formed by merging the three insurers will be the largest non-life insurance company in India, valued at Rs 1.2-1.5 lakh crore.