The government has prepared new enterprise-level Key Performance Indicators (KPIs) for state-owned general insurers for FY27, as reported by Business Standard. The move aims to lower the Incurred Claims Ratio (ICR), which shows how much of the money collected as premiums insurers pay out in the form of claims, to 85% over the next five years.
Called a “Stick and Carrot” framework by industry experts, the new framework aims to reform public sector insurers into sustainable, customer-centric, and digitally savvy institutions. Operational targets include tackling inefficiencies, legacy systems, and improving competitiveness in a market where private insurers sit ahead of the curve.
New Rules for PSU Insurers
The proposal defines clear targets that PSU insurers are expected to meet in the upcoming financial years.
- Group health insurance portfolios should see an ICR reduction by 3 percentage points annually
- Retail health share is to be raised at a rate of 5% annually
- Agency and direct channel business needs to be enhanced by 5% annually
- Focus to be reoriented in growing private car and No Claim Bonus portfolios
- In offices where cashless claim settlements lie below 80%, insurers are to plan a strategic increase by 5%
- Every PSU insurer should release 10 short insurance videos in every quarter
- PSU insurers in health and motor segments should launch at least two new products annually
A significant development of the proposal lies in the reward and performance evaluation systems outlined in it. Improvements in loss ratios, increases in premium income, growth in policy figures, and operational target achievement will now attract rewards. Poor underwriting and poor claims management will be treated as operational concerns. Measures have also been introduced to improve accountability among service providers, intermediaries, and underperforming officers.
For existing customers, the new framework promises better grievance redressal outcomes and increased compliance among the Insurance Ombudsman. Faster settlement targets mean less financial strain and a claim process that involves less friction. Policyholders can now expect quick cashless discharges, efficient pre-authorisations, and more transparency from their insurer.
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Escalation When a Claim is Rejected
The new framework marks a key moment for Public Sector General Insurance Companies in India as well as their existing customers. When a claim is rejected, accountability is assured. Policyholders can ensure they do not get cheated out of what is owed to them by escalating complaints through proper channels.
- Gather all essential documents, including the claim rejection letter, policy document, filed records, previous correspondence, etc.
- File an internal grievance to the insurance company’s grievance cell with the evidence
- If no response or an unsatisfactory response is received, escalate to the IRDAI through the Integrated Grievance Management System (IGMS) or the Insurance Ombudsman
- In case a satisfactory outcome isn’t met, policyholders can approach a consumer court for recourse
At all levels of the grievance redressal mechanism, from the filing of an internal grievance to approaching a consumer court, policyholders should maintain transparency. MyRupia provides independent guidance on grievance resolution and detailed information on various insurance products in the Indian market. Get IRDAI escalation support and clear practical guidance from impartial experts for a secure and protected financial future.
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.