DFS Secretary pushes public insurers to cut claim ratios, fix grievances
Synopsis
India's top public sector general insurers were put on notice at a high-level DFS review on 2 September — directed to cut claim ratios, standardise KPIs with quarterly checks, and urgently fix customer grievance quality. It is a sharper, more structured accountability push than previous rounds, with insurance penetration gaps and profitability concerns both squarely in focus.
Key Takeaways
DFS Secretary Sanjay Lohiya chaired a performance review of public sector general insurers on 2 September in New Delhi .
Companies directed to reduce the incurred claim ratio (ICR) and focus on profitable lines of business.
Faster, higher-quality redressal of customer grievances was explicitly mandated.
A standardised KPI framework with quarterly reviews is to be adopted across all four insurers.
The review covered FY 2025–26 performance of National Insurance , United India Insurance , Oriental Insurance , and Agriculture Insurance Company of India .
Improved insurance penetration in underserved areas and reduction of protection gaps were also flagged as priorities.
Department of Financial Services (DFS) Secretary Sanjay Lohiya on Wednesday, 2 September chaired a high-level performance review of India's four public sector general insurance companies, directing them to sharpen their focus on profitable business lines and adopt concrete measures to reduce the incurred claim ratio (ICR). The review, held in New Delhi, also placed strong emphasis on faster and higher-quality resolution of customer grievances.
Key Directives from the Review
Lohiya urged the government-owned insurers — National Insurance, United India Insurance, Oriental Insurance, and Agriculture Insurance Company of India — to deepen their use of technology and accelerate digitalisation, while simultaneously optimising expenditure on IT and related digital initiatives. He stressed that customer grievance redressal must be both swift and substantive, with adequate attention paid to the quality of each resolution, according to an official statement issued after the meeting.
The DFS Secretary also called for improved communication strategies, including greater use of social media and other outreach platforms, to raise awareness of insurance products and extend the companies' reach into underserved segments and geographies.
Performance Under the Scanner
The review covered the financial and business performance of all four public sector general insurers for FY 2025–26, examining underwriting performance across every line of business, key performance indicators (KPIs), digital initiatives, and broader operational issues. Notably, the ICR — which measures claims paid out as a proportion of premiums earned — has been a persistent pressure point for state-owned insurers, often running above commercially sustainable levels.
Lohiya further directed the companies to improve insurance penetration and density across the country while actively working to reduce protection gaps, particularly in rural and semi-urban markets. He emphasised the need for a robust, standardised KPI framework that enables consistent and comparable assessment of both financial and non-financial performance across all four firms, with quarterly reviews mandated going forward.
Who Attended the Meeting
The review was attended by the chairmen and managing directors of all four companies: Rajeshwari Singh Muni (National Insurance Company Ltd), Bhupesh S. Rahul (United India Insurance Company Ltd), Sanjay Joshi (The Oriental Insurance Company Ltd), and Lavanya R. Mundayur (Agriculture Insurance Company of India Ltd). Additional Secretary Debasish Prusty and other senior DFS officials also participated in the discussions.
Why This Matters
Public sector general insurers have faced sustained pressure on profitability, with high claim ratios and rising operational costs squeezing margins. This is not the first such directive — the DFS has periodically convened performance reviews to push state-owned financial institutions toward greater efficiency and accountability. However, the explicit linkage of a standardised KPI framework with quarterly monitoring signals a more structured oversight approach than previous rounds. With insurance penetration in India still well below global averages, the push to reach underserved segments also carries broader financial inclusion implications. How effectively these directives translate into operational change at each company will be closely watched in the quarters ahead.
Point of View
Quarterly KPI framework that would, for the first time, allow consistent cross-company comparison of both financial and non-financial performance. The real question is enforcement — previous reviews have produced similar advisories without measurable shifts in claim ratios or grievance turnaround times. Public sector insurers operate under constraints — social mandates, legacy portfolios, and workforce rigidities — that private peers do not, and no directive alone resolves those. If the KPI framework is made public and tied to leadership accountability, it could mark a genuine shift; if it remains an internal compliance exercise, the outcome will likely mirror past cycles.
NationPress
2 Sept 2026
Frequently Asked Questions
What was the DFS performance review of public sector insurers about?
The review, chaired by DFS Secretary Sanjay Lohiya on 2 September, assessed the financial and business performance of National Insurance, United India Insurance, Oriental Insurance, and Agriculture Insurance Company of India for FY 2025–26. Key focus areas included underwriting performance, claim ratios, digital initiatives, and customer grievance redressal.
What is the incurred claim ratio (ICR) and why does it matter?
The incurred claim ratio (ICR) measures the proportion of claims paid out relative to premiums earned by an insurer. A high ICR indicates that a company is paying out more in claims than is commercially sustainable, directly pressuring profitability — a longstanding challenge for India's public sector general insurers.
Which companies were covered in the DFS review?
The four public sector general insurance companies reviewed were National Insurance Company Ltd, United India Insurance Company Ltd, The Oriental Insurance Company Ltd, and Agriculture Insurance Company of India Ltd. Their respective CMDs attended the meeting.
What is the new KPI framework being introduced?
DFS Secretary Lohiya directed all four insurers to adopt a robust, standardised KPI framework that enables consistent and comparable assessment of both financial and non-financial performance across companies. These KPIs are to be reviewed on a quarterly basis.
Why is insurance penetration in underserved areas a concern?
India's overall insurance penetration remains below global averages, with rural and semi-urban populations particularly underserved. The DFS review directed public sector insurers to improve outreach in these segments and reduce protection gaps, aligning with broader financial inclusion goals.
