Insurance companies must reduce the number of policyholder complaints and also ensure that the premium-paying public gets the facilities they expect at the time of buying the policy, said Satyajit Tripathy, Member (Distribution), IRDAI.

Referring to the three parts of insurance – pricing based on the actuarial calculation, the development and design of the product, and finally selling the product, Tripathy said: “Having sold the product, what are the kind of grievances that come to the regulator? Very frankly, the grievances that are raised against life and non-life companies are totally different.

“So when we talk about the next boom, the issue starts from the bottom, in the sense that from the end of the product, that is from the grievance. Why are there so many grievances?”

Speaking at CII’s Financing 3.0 Summit, the IRDAI member said the grievances in the life insurance sector are not about the claim amount or the time taken for settlement, but about the product itself.

“In case of death.... the claim amount comes. That is not a grouse. The grouse is about the misselling of a product. And I must say that it is at an alarming level. It has caught the attention of the policymakers. The policy makers are very concerned and they want this to be addressed.

“And if we talk about the boom (in the insurance sector) in the coming days....that we increase the penetration, we increase the sale of the various products, and we make it affordable, then we must address the grievances.,” Tripathy said.

He noted that the complaint or the grievance in the the non-life sector are dynamically different.

“It is not about the misselling of a product. it is particularly about payment of claims, the claims being rejected. The amount of claims that are being paid is substantially less than what was expected. And, of course, at that point in time, the exclusions in the contract, though legally binding, are sentimentally very much opposed.

“You have a grievance redressal mechanism within the company. Above that, you have the Ombudsman to settle the issues. Despite that, even in non-life also, majority of the grievances come from health, (8:37) very few maybe from other areas,” Tripathy said.

Aarati Krishnan, Consulting Editor, businessline, said: “The insurance industry cannot move on to the next level of penetration or growth without addressing the poor customer experience...The life industry needs to focus on protection products...To measure insurance penetration, instead of looking at premiums paid by GDP, we should be looking at the sum assured (benefit customers get) by GDP and the sum assured by population.

“When it comes to health insurance, policy holder needs certainty in settlement of claims...The industry can look at an awareness campaign to make policyholder saware of medical conditions and exclusions.”