Looking at today’s disruptive times, insurance policyholders in India face significant challenges when addressing grievances. This is largely due to the complexity and technicality of insurance products. Insurance jargon - terms like "co-pay," "proportionate deductions," or industry-specific references such as "GIPSA" - can be difficult for a common person to comprehend. And due to this linguistic barrier, it often prevents policyholders from fully understanding the reasons for claim rejections, which encompasses complex conditions related to co-payment clauses, proportionate deductions, or public sector insurance policies.
Additionally, while numerous regulations exist to protect policyholders - for instance, the five-year moratorium period for health policies or Section 45 in life insurance - these regulations are often obscure or difficult for the average policyholder to navigate. Furthermore, a regulation like the prohibition on splitting life insurance policies may be particularly confusing. These complexities, coupled with the need to explain health parameters and medical justifications in case of health claim rejections, place an unfair burden on policyholders; thereby requiring them to understand too many technical details to effectively challenge grievances.
Leveraging Technology for Streamlined Grievance Resolution
Devising or integrating innovative, technology-driven solutions such as AI, blockchain, and chatbots can greatly help overcome the aforementioned challenges as these technologies can simplify the grievance process. So to take an example, the development of Optical Character Recognition (OCR) technology can read policy documents, summarize benefits, and eliminate confusing insurance jargon, hence making it really easy for policyholders to understand their entitlements and potential reasons for claim rejections. Furthermore, AI can assist in building grievance applications which can be carried out by referencing successful past cases and highlighting relevant regulations based on the specific type of complaint. Hence, it is important for insurance players to bridge these gaps by leveraging such advanced technologies to make the grievance journey more straightforward for policyholders.
The Role of Regulatory Bodies
It is important to note that regulatory bodies such as the Insurance Regulatory and Development Authority of India (IRDAI) play an imperative role in steering innovative grievance redressal mechanisms. For instance, platforms like BIMA Bharosa and the Insurance Ombudsman provide formal grievance channels for policyholders. However, one of the pressing challenges is how complaints are presented. Oftentimes, policyholders tend to focus on emotional aspects rather than clearly outlining the critical facts. Furthermore, the Ombudsman process can feel intimidating for policyholders, as they must present their cases against insurance experts; hence giving rise to an imbalanced environment.
Adding to this, IRDAI can also enhance these platforms by integrating more technology-driven tools to streamline the overall process. With this, it would help policyholders present their cases more effectively; thereby ensuring their grievances are heard and resolved in a more equitable manner.
The Potential of Alternative Dispute Resolution
When it comes to expediting grievance resolution, alternative dispute resolution methods like mediation or online arbitration could also be integrated into the Indian insurance sector. While online complaint filing is technically available, there are many ombudsman offices that still require physical copies which undermine the convenience of digital submissions. Hence, this outdated practice forces policyholders to travel to Ombudsman offices which causes unnecessary inconvenience. Furthermore, in some cases, it also discourages them from pursuing their complaints. With this, transitioning to a fully digital system, including online mediation, would greatly enhance accessibility and efficiency while resolving disputes.
Balancing Innovation and Transparency
Insurers must strike a balance between innovation in grievance redressal systems and maintaining transparency & trust with policyholders. This can be carried out by ensuring that all decisions adhere to policyholder-friendly guidelines set by the IRDAI which results in insurers being able to foster greater trust. This demonstrates that insurers can adopt a more customer-centric approach that thoroughly evaluates genuine complaints, thereby supporting policyholders and enhancing trust in the insurance process.
So to wrap it up, driving the much needed innovation through AI, blockchain, and digital tools, while also integrating alternative dispute resolution mechanisms can significantly improve the grievance redressal process in the Indian insurance sector. Given the situation, regulatory bodies like the IRDAI, alongside insurers, will have a vital role to play in ensuring these innovations are implemented and are being maintained with transparency and fairness for all policyholders.
About the Author
Shilpa Arora brings over 27 years of experience in insurance and pharmaceuticals. She is a promising leader with a acumen to lead the operations and strategy of the company which creates value for customers while empowering teams, and achieving excellence in insurance services. Her unparalleled expertise encompasses specialties including insurance, sales development, team building, classroom and field training.
