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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IRDAI chief Ajay Seth | Photo: Kamlesh Pednekar
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The Insurance Regulatory and Development Authority of India (Irdai) is closely monitoring gaps in health insurance claim settlement, where the number of claims settled is high, but the amount settled vis-à-vis the amount claimed remains lower than expected.
The regulator expects insurers to be prompt, fair, and transparent in claim settlement, said Ajay Seth, chairman of Irdai, warning that anything less would weaken trust in the insurance sector.
Speaking at 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.”
“Our expectation from insurers is clear — prompt, fair, and transparent claim settlement. Anything less weakens the trust on which our industry is built,” he added.
Industry settled ₹8.36 trillion in claims in FY25
During FY25, general and health insurers settled 3.26 crore health insurance claims, paying out ₹94,247 crore towards health claim settlements.
Overall, the insurance industry settled claims worth ₹8.36 trillion during the year. Total premium collections stood at ₹11.93 trillion, of which the life insurance sector accounted for ₹8.86 trillion, while general and health insurers contributed the rest.
Insurance penetration still low
Despite progress, Seth said insurance penetration in India continues to remain low. “Though expanding, the number of people in the insurance fold needs to grow faster,” he said.
He urged the industry to expand outreach, particularly 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.
Regulator pushing for digital access and innovation
Seth highlighted that the Irdai is working to expand digital access for easier policy purchase, servicing, and claims. The regulator is also promoting innovation by giving insurers greater product design flexibility, encouraging micro-insurance and inclusive models, and emphasising simple communication so that “insurance can be understood before it is 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.
Grievance redressal improving, says Irdai
During the past year, 2.57 lakh policyholder grievances were registered through the Bima Bharosa platform, with nearly 99 per cent resolution, Seth noted.
He emphasised that fair treatment, proper disclosure, responsible conduct, and robust complaint handling are vital to realising the 2047 vision.
“By quick, fair, and just awards, the insurance ombudsman can strengthen policyholder trust and create a positive impact on the entire industry,” he said.
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