Irdai monitoring gaps in health insurance claim settlements: Chairman Seth

Ajay Seth says claim payouts often fall short of expectations; stresses prompt, transparent settlement to build trust and achieve 'Insurance for All' by 2047

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The Insurance Regulatory and Development Authority of India (Irdai) is closely monitoring the gaps in health insurance claim settlements, wherein the number of claims settled is high, but the amount settled vis-a-vis the amount claimed is lower than expected, Ajay Seth, chairman, Irdai, said.

 

The insurance regulator expects insurers to be prompt, fair, and transparent in claim settlement as anything less will weaken the trust in the insurance sector, he said.

 

Speaking at the BimaLokpal Day, Seth said, “In health insurance, we continue to see gaps- while the number of claims settled is high, the amount settled, especially in full, is sometimes lower than expected. This is an area we are monitoring closely”.

 

During FY25, general and health insurers have settled 3.26 crore health insurance claims and paid ₹94,247 crore towards the settlement of health insurance claims.

 

Overall, the insurance industry settled claims worth ₹8.36 trillion in FY25. During the same period, the industry collected premiums to the tune of ₹11.93 trillion, of which the life insurance sector accounted for nearly ₹8.86 trillion, and the rest was by general and health insurers.

 

“Despite this progress, we must be candid about the gaps that remain. Insurance penetration continues to remain low. Though expanding, the number of people in the insurance fold needs to grow faster,” Seth said, adding that the industry needs to do more to deepen the reach of insurance, especially in underserved rural areas, among informal sector workers, and women.

 

“In a country as vast and diverse as ours, we need faster progress to meet the vision of ‘Insurance for All’ by 2047,” he said.

 

Additionally, he highlighted that as a regulator, Irdai is expanding digital access to make buying, servicing, and claiming more convenient. It is also promoting innovation by giving insurers greater flexibility in product design, encouraging micro-insurance and inclusive models that reach the entire country, emphasising simplicity in communication — because insurance must be understood before it can be trusted.

 

“We are also refining our regulatory approach to be both facilitative and firm — easing the path for good players while holding all accountable to high standards,” Seth said.

 

Seth also highlighted that in the past year, 257,000 policyholder grievances were registered through the Bima Bharosa platform, and a vast majority of these were resolved, with the industry’s resolution rate at nearly 99 per cent.

 

“In order to realise our vision for insurance for all by 2047, it’s very important to ensure fair treatment to the policyholders, proper disclosures of facts, responsible business conduct by insurers and intermediaries, objective and adequate advice to the policyholders, protection of assets and data, including from fraud and abuse, adequate complaints handling, and redressal mechanisms,” Seth said, adding that the role of the insurance ombudsman becomes paramount to build the trust on which this framework is built on.

 

“By quick, fast, and just awards, the insurance ombudsman can bring the trust of the policyholders in the insurance system and insurance as a product and create a positive impact on the entire industry,” he further said.

 

Recently, Irdai has been encouraging insurers to appoint an internal ombudsman — a step that will bring faster and more accountable resolutions to the policyholder. Irdai has already issued an exposure draft and the comments received in this regard are under examination, Seth said, adding that Irdai, after due consideration to the comments, will be issuing the necessary guidelines in this regard.