The four state-owned general insurance companies are likely to take a decision on their course of action on the insurance deals of the public sector undertakings, which are to the tune of Rs 2,000 crore. Industry sources said that an appropriate decision would be taken with a view to keep away competition from private sector insurance players.

"Though the four-state owned companies have been covering it till now, we do not want to take chances after Indian Airlines and Air India invited bids even from private insurers," a senior official of a public sector general insurance company said.

In case, some of the PSUs decide to invite bids from private insurance companies as well, the dent into the current insurance pie for public sector insurance sector could have a significant impact.

"One of the strategies could be to continue to jointly bid for the PSUs," a source said.

It may be noted that in the case of Indian Airlines and Air India, the four companies have been jointly awarded the insurance deals after they put in a single bid. Indian Airlines and Air India have an insurance cover of about Rs 90 crore each.

Sources said that the oil PSUs contribute significantly to the insurance pie. For example, ONGC has an insurance cover of about Rs 300 crore.

Meanwhile, general insurance companies have cut down the number of leaves, while increasing the working hours to improve efficiency and productivity levels. Competition in the sector may further hot up once the foreign direct investment level is raised to 49% from 26% for private insurance companies.

"There would be more companies in the field, and therefore, competition would also intensify," the sources said. General insurance companies are also collecting data for various sectors in a bid to move towards a de-tariffed regime.

(www.financialexpress.com)