At a time when the insurance regulator is pushing to increase insurance penetration, misselling of life insurance policies is at an alarming level, which has grabbed the policymakers’ attention and needs to be addressed, a top official from the Insurance Regulatory and Development Authority of India (Irdai) said.
According to Satyajit Tripathy, Member-Distribution of Irdai, life insurance grievances are often related to the product, while non-life grievances usually concern claim payments and exclusions. He said in order to increase penetration, the industry must address these grievances.
Speaking at the CII Financial Summit 3.0 in Mumbai, Tripathy said, “Grouse (in life insurance) is about mis-selling a product, and I must say that it is at an alarming level. It is at an alarming level because it has caught the attention of the policymakers. If we are talking about increasing penetration, sale of various products, making it affordable, then we must address these grievances.”
According to Irdai’s annual report for FY23 detailing the status of grievances as per the Bima Bharosa portal, the total number of grievances registered with life insurers stood at 1,24,293, where the share of unfair business practices grievances stood at 20 per cent. In the case of non-life insurers, the number of grievances stood at 78,347, where those related to claims accounted for 66 per cent.
Tripathy said in the case of the non-life insurance sector, the grievances are more about the payment of claims in terms of claims being rejected or substantially less claims paid. The majority of the grievances came from health insurance.
As a method of making claims a seamless process, he elaborated on the role of AI-driven processes in making the claims process a paperless activity in the majority of retail motor insurance claims, thereby reducing the trust deficit except in the case of a few complaints.
Similarly, efforts by the Ministry of Health, the insurance regulator, and other stakeholders in developing cashless facilities for health insurance are likely to ensure that almost the majority of the population gets into the health insurance space soon.
First Published: Sep 03 2024 | 6:53 PM IST
