Health Insurance Is 61% of India's Insurance Ombudsman Complaints but 11% of Premiums, and IRDAI Still Cannot Say Why Claims Are Denied

Health insurance is the part of India's insurance market that generates the most complaints relative to its size, and the regulator's data show that it has been getting worse. Business Standard, in a "Datanomics" analysis published on June 9, 2026 that attributes its data to the Insurance Regulatory and Development Authority of India, reports that insurance complaints nearly doubled over six years since FY20 and that the growth was driven largely by health insurance. Health's share of complaints rose from 38.64% in FY20 to 61.49% in FY25. Health insurance accounts for only 10.68% of total insurance premiums, so its complaint share is more than six times its premium share. Life insurance, by contrast, has close to three-quarters of total premiums but about 30% of complaints. The article says insurance ombudsmen resolved 41,055 grievances in FY26. It does not say whether that figure counts complaints filed or resolved beyond using the word resolved, and it does not name the IRDAI report from which the data come.

Parliament has been given consistent numbers. CafeMutual reported on April 1, 2026 that a written reply by the Minister of State for Finance, Pankaj Chaudhary, to a Lok Sabha question gave health insurance complaints of 47,658 in FY24, 64,365 in FY25 and 73,729 in FY26 up to February 2026. The FY26 figure covers roughly eleven months, so the full-year total will be higher. The Business Standard analysis ranks Star Health at the top of the complaints chart among general and health insurers, with a complaint share nearly three times its premium share, and National Insurance, a public sector insurer, second. Mumbai and Pune together account for nearly 20% of annual complaint filings.

The claims figures come from a later reply. Insurance Business Asia reported on July 27, 2026 on a Lok Sabha reply delivered on July 24, which cited IRDAI's annual report for 2024-25. Indian insurers processed 3.26 crore, or 32.6 million, health claims in the year ending March 2025. Of these, 87% were settled and 8% were repudiated, meaning roughly one claim in twelve was not paid, and about 5% were still pending at year end. The article states that IRDAI "holds no data on why those claims are denied": the regulator collects only overall repudiation rates, not the reasons for individual denials, and insurer-wise data on claims rejected on grounds such as "non-medical necessity" or "exclusion" over the past three years is not available. In an earlier reply, the minister said there is no specific category for hospitalisation claims rejected because the treatment was classed as out-patient care, so the system does not record them separately. The government also said it has no proposal to require insurers to give the treating doctor's opinion overriding precedence, because a doctor's opinion is one input among several that insurers weigh, with clinical records, medical standards, treatment protocols and policy conditions.

The grievance system has its own figures. Bima Bharosa, the regulator's complaint platform, recorded 257,790 complaints in FY2024-25, up about 20% from 215,569 the previous year, and claim-related issues made up about 69% of grievances for general and health insurers. The 17 insurance ombudsman offices received 53,184 complaints in FY2024-25, according to the Council for Insurance Ombudsmen annual report, and about 71% were resolved in the policyholder's favour. Health disputes were about 64% of ombudsman complaints, life about 24% and motor about 9%. Because these figures are measured on different bases, they should not be added to or compared directly with the Business Standard percentages, which describe the share of complaints in the regulator's data over time.

Reforms have targeted process rather than reasons. The article lists the Master Circular on Protection of Policyholders' Interests, 2024, mandatory customer information sheets, a 30-day free-look period, one-hour cashless pre-authorisation decisions and three-hour discharge authorisation timelines. None of these requires insurers to disclose, or IRDAI to collect, insurer-wise reasons for individual claim denials. In May 2025, Finance Minister Nirmala Sitharaman directed public sector general insurers to adopt AI-driven claim settlement for motor own damage and health insurance. Insurance penetration fell to 3.7% of GDP in FY2024 from 4% in FY2022-23 and 4.2% during the pandemic years, and WTW projects Asia-Pacific medical cost increases of 14% in 2026, up from 13.2% in 2025.

A related development is IRDAI's May 25, 2026 circular linking executive pay to claims responsiveness and grievance redressal, which will require insurers to publish monthly claims and grievance data. That could address part of the information gap, although the sources reviewed do not say it will require reasons for rejection.

For policyholders, the practical advice that follows from the data is modest: keep treatment records and correspondence, read exclusions and waiting periods before buying, escalate unresolved complaints through the insurer's grievance process and, if necessary, the ombudsman. For regulators, the figures suggest that understanding why one claim in twelve is repudiated would be a useful next step.