The central government has directed its six non-life insurance companies to adopt austerity measures, to save 20 per cent cost this fiscal, owing to lowering of business due to COVID-19 impact.
The Department of Financial Services (DFS) has sent a communication to this effect to these companies. These six company are– New India Assurance Company Limited, National Insurance Company Limited, Oriental Insurance Company Limited, United India Insurance Company Limited, General Insurance Corporation of India Limited and Agriculture Insurance Company of India Limited.
Pointing out that reduced business may hit their profitability; the DFS has advised the companies to take cost saving measures like: reducing office expenses by 15 per cent, stopping advertisements except statutory ones, ban on fresh recruitment, and no fresh financial commitments.
The government has also banned foreign travel for Chairman and Managing Directors, Directors and General Managers unless to acquire fresh business or negotiating reinsurance agreements.
While no pay cut has been suggested for the employees, the wage revision talks may not happen any soon owing to COVID-19 pandemic.
