As of the end of FY24, the life insurance industry in India reported unclaimed amounts totaling ₹20,062.0 crore, reflecting a decline from ₹22,237.0 crore at the beginning of the financial year. This reduction is attributed to several initiatives undertaken by the Insurance Regulatory and Development Authority of India (IRDAI) aimed at expediting refunds to policyholders and preventing the accumulation of unclaimed funds.
IRDAI’s annual report for FY24 revealed that the unclaimed amounts had decreased from ₹22,237 crore to ₹20,062 crore, demonstrating the impact of regulatory measures. Additionally, the life insurance sector’s commitment to consumer engagement and transparency is evident in the increase in death claims and the proactive approach towards managing unclaimed amounts.
What is the unclaimed amount, death claim, and key measures taken by IRDA
- Reduction in Unclaimed Amounts: The life insurance sector saw a net decrease of ₹1,018 crore in unclaimed amounts during a special six-month drive initiated by IRDAI.
- Regulatory Measures: IRDAI implemented amendments to the ‘Master Circular on Unclaimed Amounts’ to facilitate better identification and disbursement of unclaimed funds.
- Consumer Engagement: Insurers were encouraged to prompt policyholders to update their contact and KYC details to minimize unclaimed amounts.
- Industry Benefits Paid: The life insurance industry paid total benefits of ₹5.77 lakh crore in FY24, accounting for 70.22% of net premiums, with a notable increase in surrenders and withdrawals.
- Death Claims: Death claims paid by life insurers rose to ₹48,512 crore in FY24, up from ₹46,380 crore in the previous year.
What initiatives are taken by IRDA to improve the unclaimed amount clearance till now?
Reduction Initiatives
IRDAI’s special drive, conducted from June to November 2023, focused on reducing unclaimed amounts by monitoring the clearance process monthly. The drive successfully reduced the unclaimed amounts by ₹1,018 crore, highlighting the effectiveness of regulatory oversight and proactive measures.
Regulatory Amendments
In February 2024, IRDAI amended the ‘Master Circular on Unclaimed Amounts’ to enhance the identification and efficient disbursement of unclaimed funds. This included redefining ‘unclaimed amounts’ and recommending best practices for insurers to adopt, aimed at both reducing existing unclaimed amounts and preventing future accumulation.
Consumer Engagement Strategies
To further mitigate unclaimed amounts, IRDAI urged insurers to engage policyholders actively. Strategies included:
- Prompting policyholders to update their contact and KYC details during policy renewals.
- Collaborating with credit bureaus to trace consumers.
- Utilizing various media channels for advertising and outreach.
- Providing a web link for unclaimed amounts on the Bima Bharosa portal, allowing beneficiaries to search for unclaimed funds.
Industry Financial Performance
The life insurance sector demonstrated strong financial performance in FY24, with total benefits paid amounting to ₹5.77 lakh crore, which constituted 70.22% of net premiums. Benefits related to surrenders and withdrawals increased by 15.29%, indicating a growing trend in policyholder engagement and claims processing.
What Was the Death Claims Statistics of Insurance Policy Holders?
The increase in death claims, rising to ₹48,512 crore, reflects a robust response from life insurers to policyholder claims. This figure includes ₹28,868 crore from individual business and ₹19,644 crore from group business, showcasing the sector’s commitment to fulfilling its obligations to beneficiaries.
Conclusion
The life insurance industry in India has made significant strides in reducing unclaimed amounts through regulatory initiatives and consumer engagement strategies. The decrease in unclaimed amounts from ₹22,237.0 crore to ₹20,062.0 crore illustrates the effectiveness of IRDAI’s interventions. Furthermore, the industry’s strong financial performance and rising death claims highlight its resilience and commitment to policyholders. Overall, these developments suggest a positive trend towards greater accountability and consumer satisfaction within the life insurance sector.
