When it comes to health insurance in India, affordability is only half the story. The real test comes at the time of claims settlement—and recent data shows that some leading insurers are struggling. According to the latest report by the Insurance Ombudsman, Star Health and CARE Health Insurance have recorded the highest number of complaints per lakh policyholders, with most grievances linked to claim repudiation.
This trend has raised concerns about consumer trust, prompting the Insurance Regulatory and Development Authority of India (IRDAI) to mandate stricter grievance redressal norms.
Complaint Trends: What the Data Shows
The Ombudsman report highlights that:
- Star Health faced the maximum number of complaints in relation to its large customer base.
- CARE Health Insurance followed closely, reflecting similar issues.
- The majority of grievances were linked to claim repudiations—cases where insurers rejected claims citing exclusions, incomplete documentation, or technical grounds.
Such rising complaints point to a gap between policyholder expectations and insurer practices, especially in interpreting policy clauses.
Health Insurers with Highest Complaints (per 1 Lakh Policies)
| Insurer | Complaints per 1 Lakh Policies |
Major Cause |
|---|---|---|
| Star Health | 92 | Claim Rejection |
| CARE Health | 85 | Claim Rejection |
| ICICI Lombard | 54 | Policy Terms |
| New India Assurance | 47 | Documentation |
Source: Insurance Ombudsman Report, August 2025
IRDAI’s Response: Internal Ombudsman System
To restore confidence, IRDAI has announced a new framework that makes it mandatory for insurers to appoint an internal ombudsman.
- This ombudsman will be independent of the claims department.
- All claim rejections and major complaints must pass through the ombudsman before reaching the external Ombudsman or courts.
- The goal is to ensure a fairer and quicker resolution process for policyholders.
This move is expected to reduce the load on external dispute resolution forums and provide relief to thousands of customers facing delays.
Why It Matters for Policyholders
For Indian families, health insurance is often their first line of defense against rising medical costs. But if claim rejections remain high, people may hesitate to renew or purchase new policies.
- Greater Transparency: With internal ombudsmen, customers may get more clarity on why claims are being rejected.
- Faster Resolution: Instead of waiting months in litigation, disputes could be resolved within weeks.
- Consumer Trust: A streamlined process could boost confidence in health insurance as a reliable financial safety net.
A one-stop hub for insurance comparisons, claim guidance, and trusted policy insights. Explore Now
Industry Watch: A Wake-Up Call
Experts say this development is a wake-up call for private insurers. Companies like Star Health and CARE Health Insurance must now improve their claim processing systems, enhance customer communication, and invest in digital grievance handling platforms.
As competition intensifies and IRDAI pushes reforms like GST exemptions on health premiums (under discussion), insurers who fail to address consumer dissatisfaction risk losing market share.
Why This Matters for Agents & Advisors
For insurance agents, this news is a reminder that customer experience doesn’t end with policy issuance. Agents who proactively guide clients during claims and ensure proper documentation will build long-term trust—a factor that directly impacts renewal income.
As health insurers face scrutiny and IRDAI pushes for consumer-centric reforms, one thing is clear: in the Indian insurance market, trust is as important as coverage.
Want to Build a Career in Insurance?
Join our HDFC Life Agent Network and get digital tools, training, and a ready-made support system to succeed.
Apply Now to Become an Agent
