The Department of Financial Services has asked India’s public sector general insurers to bring down their incurred claim ratios, report against a common set of performance indicators every quarter and settle customer complaints faster. The instructions came at a review of their 2025-26 performance held on 2 September.
What the DFS Secretary Told the Four Insurers
DFS Secretary Sanjay Lohiya chaired the review of the financial and business performance of Public Sector General Insurance Companies for FY 2025-26. It covered underwriting performance across all lines of business, key performance indicators, digital initiatives and other operational matters. National Insurance CMD Rajeshwari Singh Muni, United India Insurance CMD Bhupesh S. Rahul, Oriental Insurance CMD Sanjay Joshi and Agriculture Insurance Company CMD Lavanya R. Mundayur attended, along with DFS Additional Secretary Debasish Prusty.
The Secretary advised the companies to strengthen their focus on profitable lines of business and adopt suitable measures to bring down the Incurred Claim Ratio. The ICR is the share of premium collected that an insurer pays out as claims.
He also emphasised the need to strengthen performance monitoring through a robust and standardised KPI framework across the four companies, with indicators that allow consistent and comparable assessment of financial as well as non-financial performance, reviewed on a quarterly basis. The companies were asked to make greater use of technology while optimising IT spending, improve publicity and customer outreach including through social media, and lift insurance penetration and density in underserved areas. On service, the Secretary asked for expeditious redressal of customer grievances and attention to the quality of that redressal, not only the speed.
Why the Claim Ratio Push Matters for Policyholders
The push follows a difficult year. Industry gross direct premium grew about 9 per cent in FY26 to Rs 3.36 lakh crore, but the combined ratio worsened by two points to 113 per cent and profit after tax fell 23 per cent to around Rs 10,000 crore, according to a BCG report released in August. Public sector insurers grew slower than private players, at 8 per cent against 10 per cent.
For policyholders, the ICR instruction cuts both ways. Insurers usually lower claim ratios by pricing risk more accurately, tightening underwriting at the proposal stage and controlling leakage in hospital and garage networks. That can mean sharper questions when buying a policy, firmer scrutiny of high-loss segments and less appetite for underpriced group and motor business. It does not mean valid claims should be turned down, and the same meeting made faster and better grievance handling a stated target.
How to Read an Insurer’s Numbers Before Buying
The claim ratio is a number buyers can check themselves. IRDAI publishes incurred claim ratios for every general insurer in its annual report, and insurers disclose claim data on their websites in their public disclosures. Read alongside the solvency ratio and complaint volumes, it gives a fuller picture than any single figure.
Anyone weighing those numbers before renewing or switching a policy can use MyRupia’s independent guidance. MyRupia does not sell insurance, hold insurer partnerships or earn commissions, so its reading of an insurer’s claim record is not tied to a sale.
Its guides explain what claim, solvency and combined ratios actually measure, and its claims and grievance support helps policyholders escalate a delayed or rejected claim, including through IRDAI’s Bima Bharosa portal.
Disclaimer: This MyRupia article is for informational purposes only and is based on publicly available government, regulatory and industry sources. It should not be treated as investment, financial, tax, insurance or legal advice. Information, examples, market data and expert views mentioned in the article may change over time and should not be considered a recommendation to buy, sell, invest in or surrender any financial product. Readers should evaluate their individual circumstances and consult a qualified financial professional before making decisions.