The sustained decline in complaints in life insurance suggested the strengthened customer engagement and grievance redressal mechanisms by the insurers, according to the FSR report
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A sharp surge in customer grievances in the general insurance sector has raised fresh concerns over claims management, service quality and product communication, according to the Reserve Bank of India (RBI).
The unresolved grievances could undermine policyholder confidence and pose broader financial stability risks, RBI said.
According to the RBI’s Financial Stability Report, the number of reported grievances in the general insurance sector nearly tripled to 1.78 lakh in 2025-26 from 2021-22, signalling persistent shortcomings in customer service and claims settlement.
“The steep and sustained rise in grievances indicates systemic shortfalls in claims management, service quality and product communication,” RBI said in the report.
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 if they trigger large-scale policy exits.
LIFE INSURANCE
In contrast, the life insurance sector has shown a marked improvement in customer grievance trends.
Reported complaints, which had crossed 1.5 lakh in 2021-22, declined to 1.2 lakh in 2025-26, reflecting better market conduct, improved product suitability and stronger post-sale servicing, the report said.
The sustained decline in complaints in life insurance suggested the strengthened customer engagement and grievance redressal mechanisms by the insurers, according to the FSR report. Lower complaint volumes are also expected to reduce conduct-related reputational risks and support higher policy persistence over time.
The divergent trends between the life and general insurance segments underscore the need for general insurers to strengthen claims handling, customer communication and service standards to restore policyholder confidence, the report added.
IRDAI FOCUS
The Insurance Regulatory and Development Authority of India (IRDAI) has also been stepping up focus on resolution of grievances. The Insurance Ombudsman resolved 41,055 grievances during 2025-26, of which 79 per cent were decided in favour of the policy holders, according to IRDAI data.
It has recently directed the companies and advised the Insurance Ombudsmen 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.
Published on July 7, 2026
