Extent of Policyholders' Grievances Redressal By Indian Life Insurers

Journal Name: 
Journal of Accounting and Finance
Volume: 
Vol. 30 - No. 1
Authors: 
Author Name Designation Organization
B. Charumathi
K. Nithya
Abstract: 

When handling a customer's complaint, remember: If you can't fix it, don't drop it" - Anonymous. A "Grievance/Complaint" is defined as any communication that expresses dissatisfaction about an action or lack of action, about the standard of service/deficiency of service of an insurance company and/or any intermediary or asks for remedial action. Insurance business the world over has the dubious distinction of facing a large number of customer grievances. Intangibility of the service on offer, lack of clarity on the "give-and-take", and the complexity of the wording in the insurance contracts, are some of the causes contributing to this scenario worldwide. The Indian insurance domain is also subjected to this phenomenon. Mis-selling of insurance products due to lack of objectivity in understanding the product terms continues to be a significant factor in consumer grievances. Visibility about how and where to complain is a key component of an effective system. A grievance management system should be easily accessible to all complainants. An efficient insurer looks at a grievance as an opportunity to serve and win over the confidence of the complainant by a prompt redressal. The apex body Insurance Regulatory and Development Authority (IRDA) adopts a proactive approach by analysing the cause/ source of the complaints to identify system deficiencies and procedural slackness. Targeted and comprehensive inspections have been conducted based on the findings to rectify the systemic issues involved. In this context, this paper investigated the extent of grievances redressed by IRDA, public and private life insurers in India during 2005-06 to 2010-11. Sample for this study include 1 public and 23 private life insurers. This study found that there is a significant difference among the companies regarding the number of grievances redressed.