Complaint Storm Grips Insurers: How Claim-Related Issues Account for Over 41% of Insurance Industry Grievances

Complaint Storm Grips Insurers: How Claim-Related Issues Account for Over 41% of Insurance Industry Grievances​

Indian insurers face a massive volume of consumer grievances, with claim-related disputes dominating the landscape across life, health, and general segments. Government data presented by the Minister of State for Finance, Pankaj Chaudhary, reveals that the focus remains firmly on policy execution and service delivery. The surge in complaints underscores persistent operational challenges within the industry.

Life Insurers Lead Complaint Volume in FY2025-26​

Life insurance companies accounted for the highest share of grievances received by insurers during the financial year 2025-26, followed closely by general insurers. A total of 98,443 complaints were lodged against life insurers. Of these, 97,988 were attended to, leaving a small pool of 455 pending resolution.

General insurers received 95,258 complaints in the same period, successfully attending to 87,083 of them. Health insurers reported 41,658 grievances, with a significant majority of 41,347 being resolved during the year. This data was released during the Rajya Sabha Monsoon Session on August 4, 2026.

Complaint Trends Across Major Insurers (FY 2025-26)​

A detailed look at key players shows varying complaint loads in the life insurance sector. LIC received 59,313 complaints and resolved 59,311, with only 2 remaining pending. Other major companies like HDFC Life Insurance (7,183 received, 7,123 attended) and SBI Life Insurance (5,711 received, 5,704 attended) reported similar volumes.

In the current financial quarter (April 1 to June 30, 2026), life insurers received a total of 24,034 complaints. General insurers received slightly more at 26,675 grievances. The overall trend shows that general insurance companies currently maintain the largest share of pending complaints with 3,483 recorded as outstanding across all categories.

Claim-Related Grievances Dominate Regulatory Focus​

IRDAI’s classification reveals that claim-related grievances constituted the largest single category of complaints received by insurers during FY2025-26. Insurers received a staggering 1,23,654 claims-related complaints, of which 1,16,015 were resolved and 7,639 remain pending.

Complaints categorized as 'Others' (45,790) and Unfair Business Practices (28,789) were the next most common complaint types. Policy Related issues accounted for 27,082 grievances, while Survival Claims garnered 23,658 complaints.

Regulatory Oversight and Increased Penalties​

Minister Chaudhary stressed that IRDAI actively monitors these grievances through its Bima Bharosa portal, which tracks all complaints relating to mis-selling, unfair business practices, and claim-related issues. This regulatory attention is crucial for protecting policyholders.

The Minister highlighted the power vested in IRDAI under Section 34 of the Insurance Act, 1938, allowing it to issue protective directions to insurers. Furthermore, a significant legal enhancement was noted: through the Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Act, 2025, the maximum monetary penalty imposed by IRDAI under Section 102 of the Insurance Act, 1938, has been raised from Rs 1 crore to Rs 10 crore.

Performance Snapshot: Health and General Insurers​

In the health insurance sector, 41,658 complaints were received in FY2025-26. The primary focus is on resolving these claims accurately. Meanwhile, general insurers handled a combined load of 95,258 complaints during FY2025-26.

The figures indicate that the insurance sector, while vast, continues to operate under heavy scrutiny regarding process transparency and consumer protection, driving both regulatory action and procedural updates across major carriers like United India Insurance (11,813 received), ICICI Lombard General Insurance (11,252 received), and National Insurance (10,266 received).