Irdai Member Flags Alarming Rise In Life Insurance Misselling Complaints
Irdai Member Satyajit Tripathy reported a surge in complaints about product misselling in life insurance, with 1,24,293 grievances registered in FY23, where 20 per cent were related to unfair business practices, while non-life insurers faced 78,347 complaints, 66 per cent of which pertained to claim issues
Insurance Regulatory and Development Authority of India (Irdai) Member Satyajit Tripathy has raised concerns over the increasing number of complaints related to product misselling in the life insurance sector, stating that it has caught the attention of policymakers.
Speaking at the CII Financial Summit 3.0 in Mumbai, Tripathy highlighted the differences in grievances between the life and non-life insurance sectors. He noted that life insurance complaints often revolve around the misselling of products, while non-life grievances typically focus on claim payments and exclusions.
Tripathy emphasised the need to address these grievances to boost insurance penetration and make products more affordable. He said, "The grouse (in life insurance) is about misselling 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 the penetration and sale of various products and making them affordable, then we must address these grievances."
According to Irdai's annual report for FY23, based on data from the Bima Bharosa portal, the total number of grievances registered with life insurers stood at 1,24,293, with unfair business practices grievances accounting for 20 per cent of the total. In the non-life insurance sector, the number of grievances reached 78,347, with claims-related grievances making up 66 per cent of the total.
Tripathy further explained that non-life insurance grievances primarily concern claim payments, with complaints about rejected claims or substantially lower payouts. He noted that the majority of grievances in this sector come from health insurance.To streamline the claims process, Tripathy highlighted the role of AI-driven systems in making motor insurance claims paperless and reducing the trust deficit, except for a few complaints.
Similarly, efforts by the Ministry of Health, the Insurance Regulator, and other stakeholders to develop cashless facilities for health insurance are expected to bring a significant portion of the population under health insurance coverage soon.
