Dr. Ravi Seshadri on what a three-way merger could mean for India’s insurance ecosystem
Interview conducted by Prashant Laxmeshwar for RiskAwareness.in
As India’s general insurance sector prepares for a potentially transformative consolidation, the proposed merger of Oriental Insurance Company, National Insurance Company and United India Insurance has triggered intense debate across boardrooms, regulator corridors and distribution networks. Proponents argue that scale, capital strength and underwriting discipline could finally be restored to PSU insurers, while critics warn of execution risks and systemic disruption.
In an interview with RiskAwareness.in, Dr. Ravi Seshadri, Strategic Advisor – Insurance & Insurtech (APAC & MENA), offers a clear-eyed assessment of what such a merger could realistically deliver, where the risks lie and how the balance of power within India’s insurance market could shift over the coming decade.
Scale as strategy, not symbolism
From Dr. Seshadri’s vantage point, the strategic logic of the merger is rooted less in optics and more in operational substance. Bringing together three legacy institutions would create a single, significantly stronger entity with pooled human capital, combining experience drawn from diverse geographies and underwriting portfolios. This consolidation of expertise, he argues, would make it easier to standardise underwriting philosophies and unlock operational efficiencies that have so far remained elusive.
Equally important is the capital dimension. A merged entity would be better positioned to absorb government capital infusion and deploy it more efficiently. In a market where aggressive pricing and questionable practices have often distorted competition, greater scale could also give the merged insurer the strength to resist unethical competition rather than be drawn into it.
A reshaped competitive landscape
The systemic implications of such consolidation, however, extend far beyond the three insurers themselves. Dr. Seshadri believes some private insurers could find it increasingly difficult to compete with a merged PSU entity, particularly on pricing power and risk retention capacity. In such an environment, product innovation may emerge as the primary lever for differentiation, while larger balance sheets enable more affordable pricing for customers.
Distribution dynamics, too, are likely to be revisited. Insurers may reassess their existing channels, compelling intermediaries to adapt to new operating models and expectations. More broadly, Dr. Seshadri sees the merger as a potential corrective to India’s long-running pricing disorder. Despite detariffing in 2007, pricing discipline never fully aligned with global norms. A reorganisation of this scale, he suggests, could finally bring a degree of stabilisation, particularly benefitting retail policyholders.
Policyholders: service quality over price wars
From a policyholder’s perspective, the consolidation carries both promise and scrutiny. Dr. Seshadri places strong emphasis on regulatory oversight, noting that stringent supervision by the regulator will be critical to protecting policyholder interests, curbing mis-selling and ensuring affordability for retail customers.
Service delivery, especially in claims settlement, is likely to become a key competitive battleground. With competition intensifying, expectations around turnaround times and service standards should rise. He also anticipates a simplification of grievance redressal mechanisms, an area where policyholders have historically faced friction.
Balance sheet strength and risk capacity
On solvency and capital adequacy, Dr. Seshadri acknowledges the presence of legacy liabilities, particularly older outstanding claims. However, he sees consolidation as an enabler rather than a constraint. A pooled talent base could accelerate claims settlement, while a sharp reduction in expenses of management over time would strengthen solvency ratios.
Perhaps more significantly, the merged entity’s risk retention capacity would expand considerably, allowing it to compete more confidently across large and complex risks without excessive dependence on reinsurance.
The real test: people, culture and execution
Like most large mergers, the greatest challenges are unlikely to be strategic but human. Dr. Seshadri is candid about the cultural hurdles that come with merging three large organisations, each with its own legacy, ethos and workforce sensitivities. Human resources, he notes, will play a pivotal role in managing issues around designations, promotions and transfer policies.
Learning and development will also be critical to effective change management. Drawing on past experience, he recalls the transition programmes rolled out when private insurers entered the Indian market in the early 2000s, suggesting that similar efforts will be essential to ensure a smooth cultural integration.
New India Assurance: a deliberate divergence
Dr. Seshadri fully agrees with New India Assurance’s strong opposition to the merger of the three PSU insurance companies with New India. As a listed company with a strong balance sheet and a global footprint, New India occupies a very different strategic position. Its decision to remain independent, he argues, is both logical and defensible.
At the same time, this divergence could prove beneficial for the broader PSU ecosystem. With New India operating independently and the merged entity gaining scale, PSU insurers could collectively play a more dominant role through innovation and affordable pricing, rather than internal fragmentation.
Five to seven years on
Looking ahead, Dr. Seshadri believes the consolidation could meaningfully reposition India’s PSU general insurers in a market increasingly shaped by capital strength, technology-led underwriting and risk-based pricing. If executed well, the merger could mark a structural reset rather than a temporary fix, restoring relevance to public sector insurers in a rapidly evolving risk landscape.
