The Reserve Bank of India has reported a significant surge in customer grievances across the insurance sector, with general insurance complaints nearly tripling to 1.78 lakh in 2025-26 from 2021-22 levels. According to the RBI's Financial Stability Report, this steep and sustained rise indicates systemic shortfalls in claims management, service quality and product communication. The central bank warned that unresolved grievances could undermine policyholder confidence and pose broader financial stability risks if they trigger large-scale policy exits. The RBI cautioned that if left unaddressed, conduct risks of this magnitude could erode policyholder trust, weaken policy renewal rates and eventually emerge as a financial stability concern.
In contrast to general insurance trends, the life insurance sector demonstrated marked improvement in customer grievance management. As reported by the RBI, reported complaints declined from over 1.5 lakh in 2021-22 to 1.2 lakh in 2025-26, reflecting better market conduct, improved product suitability and stronger post-sale servicing. The sustained decline in life insurance complaints suggests strengthened customer engagement and grievance redressal mechanisms by insurers, with lower complaint volumes expected to reduce conduct-related reputational risks and support higher policy persistence over time.
The Insurance Regulatory and Development Authority of India (IRDAI) has been stepping up focus on grievance resolution, with the Insurance Ombudsman resolving 41,055 grievances during 2025-26, of which 79 per cent were decided in favour of policyholders. According to IRDAI data, the regulator has recently directed companies to focus on complaints pending beyond 90 days, delays in registration of complaints, non-entertainable complaints and increase the number of hearings conducted through video conferencing. The divergent trends between life and general insurance segments underscore the need for general insurers to strengthen claims handling, customer communication and service standards to restore policyholder confidence.
