New Delhi [India], September 2 (ANI): The Finance Ministry on Wednesday asked public sector general insurance companies to improve insurance penetration and reach underserved areas while taking steps to bring down their claim ratios and strengthen customer grievance redressal.
The directions were issued during a review of the financial and business performance of Public Sector General Insurance Companies (PSGICs) for 2025-26, chaired by Department of Financial Services Secretary Sanjay Lohiya, according to a Ministry of Finance release.
“The Secretary advised the PSGICs to strengthen their focus on profitable lines of business and adopt suitable measures to bring down the Incurred Claim Ratio (ICR),” the ministry said.
The incurred claim ratio broadly indicates the proportion of premiums collected by an insurer that is used to pay claims. A high ratio can put pressure on an insurer's underwriting profitability.
The ministry said PSGICs were also asked to make greater use of technology and speed up digitalisation while keeping expenditure on information technology and other digital initiatives under control.
The government also stressed the need to expand the reach of public sector insurers and improve awareness about insurance products, particularly among segments and regions where insurance coverage remains low.
“The Secretary further emphasised the need to improve communication, publicity and customer outreach, including through social media and other platforms, to enhance awareness about various insurance products and the outreach of the PSGICs in underserved segments and areas,” the release said.
The companies were also advised “to improve insurance penetration and density while reducing protection gaps,” according to the ministry.
The review also focused on developing a common framework to assess the performance of public sector general insurers.
The ministry said the Secretary emphasised “the need to strengthen performance monitoring through a robust and standardised KPI framework across PSGICs.”
It said the key performance indicators should allow consistent and comparable assessment of financial as well as non-financial performance across companies and should be reviewed every quarter.
Customer grievance redressal was another focus area, with the Secretary asking insurers to ensure “expeditious redressal of customer grievances and also focus on the quality of redressal.”
The meeting reviewed underwriting performance across different lines of business, key performance indicators, digital initiatives and other operational issues of the public sector insurers. (ANI)
Finance Ministry asks public sector general insurers to improve insurance penetration, reduce claim ratios
