The insurance sector in India has been under scrutiny recently, with rising grievances about claim settlements and payouts. A Delhi-based customer, frustrated by the lack of response from the insurance ombudsman’s office, took to social media, tagging Finance Minister Nirmala Sitharaman for help. This incident sheds light on the broader challenges faced by policyholders and the state of insurance claims in the country.
Why Did the Customer Seek the Finance Minister’s Help?
The complainant faced difficulties with the insurance ombudsman’s office in Delhi after his motor insurance claim was rejected by the insurer. Despite filing a complaint on December 10, 2024, the policyholder did not receive any communication, and repeated attempts to contact the ombudsman’s office went unanswered.
In his letter shared on social media, he wrote:
- The ombudsman’s office is 35 km away, causing logistical challenges.
- Calls to the office were ignored, adding to his distress.
- The rejection of his motor insurance claim left him feeling helpless.
Tagging the Finance Minister on platform X (formerly Twitter), the complainant said, “We are common man and can’t afford this stress.”
How Did Nirmala Sitharaman Respond?
The Finance Minister promptly escalated the matter to the Department of Financial Services (DFS), urging them to address the complaint. The DFS, which oversees the functioning of banks, financial institutions, and insurance companies, is expected to facilitate quicker resolution in such cases.
This intervention highlights the critical role of government agencies in addressing citizen grievances, especially when institutional redressal mechanisms fail.
What Is the Current State of Insurance Claims in India?
Claims Settlement Ratio
According to the Insurance Regulatory and Development Authority of India (IRDAI), the claim-to-settlement ratio for the non-life insurance sector stood at 86% in 2022-23, down from 87% in FY22.
Claims Ratio
The net incurred claims to net earned premium (claims ratio) was 82.52% during 2023-24, compared to 82.95% in the previous year.
| Year | Claims Ratio | Settlement Ratio |
|---|---|---|
| 2022-23 | 82.52% | 86% |
| 2021-22 | 82.95% | 87% |
These figures suggest that while the industry is growing, challenges in claims settlement persist.
What Are the Recent Trends in India’s Insurance Industry?
Growth in Non-Life Insurance
During 2023-24, the non-life insurance sector in India underwrote a total direct premium of ₹2.90 lakh crore, marking a 12.76% growth from the previous year.
Public Sector Contributions
Public sector general insurers increased their contributions by 8.88%, rising from ₹82,891 crore in 2022-23 to ₹90,252 crore in 2023-24.
Why Are Insurance Claims Under Scrutiny?
The recent focus on claim settlements is fueled by high-profile cases like Bollywood actor Saif Ali Khan’s medical insurance claim of ₹35.95 lakh for treatment at Lilavati Hospital. While his insurer approved ₹25 lakh for cashless treatment, the remaining claim awaits billing. This case sparked discussions about the disparities between claim processing for celebrities versus ordinary citizens.
Key Concerns:
- Unequal Treatment: Many alleged that celebrities often receive preferential treatment in claims processing.
- Delays in Redressal: Complaints like the Delhi man’s highlight systemic inefficiencies in insurance grievance redressal mechanisms.
- Transparency Issues: A lack of clear communication from insurers and ombudsman offices leaves policyholders feeling powerless.
FAQs
Why did the customer write to Nirmala Sitharaman?
The customer was frustrated by the lack of response from the insurance ombudsman’s office regarding his rejected motor insurance claim.
How did the Finance Minister respond to the complaint?
Nirmala Sitharaman tagged the Department of Financial Services, urging them to address the issue.
What is the claims ratio in India’s non-life insurance sector?
The net incurred claims to net earned premium (claims ratio) stood at 82.52% during 2023-24.
Why are insurance claims under scrutiny?
High-profile cases like Saif Ali Khan’s medical bill claim and systemic delays in claim redressal have drawn attention to the issue.
What is the current settlement ratio for insurance claims in India?
The settlement ratio was 86% in 2022-23, down from 87% in the previous year.
What steps can customers take if their insurance claims are rejected?
Customers can file complaints with the insurance ombudsman, escalate matters to the DFS, or seek legal recourse if necessary.
How much did the non-life insurance sector grow in 2023-24?
The sector grew by 12.76%, underwriting a total premium of ₹2.90 lakh crore.
What is the role of DFS in resolving insurance grievances?
The DFS oversees banks, insurance companies, and financial institutions, ensuring efficient grievance redressal mechanisms.
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