India’s health insurance sector has experienced robust growth, surpassing Rs 1.2 lakh crore in premiums for the 2024-25 period. The sector is expanding steadily at a rate of about 9% annually, driven by growing awareness, improved healthcare financing access, and an increasing demand for financial protection against medical costs. To enhance efficiency and provide quicker assistance to policyholders, the Insurance Regulatory and Development Authority of India has implemented strict timelines for processing cashless health insurance claims. Insurers are now required to approve cashless pre-authorization requests within one hour and provide final approval within three hours to ensure timely patient care. These measures aim to reduce delays and facilitate prompt treatment for patients.
The surge in health insurance premiums can be attributed to various factors, including an aging policyholder demographic, higher coverage amounts, and enhanced policy features. The regulator’s 2024 guidelines focus on ensuring fair pricing of insurance products based on risk factors, with regular reviews incorporating data and customer feedback. Notably, the sector has shown improvement in claims settlement, with the claims paid ratio reaching 87.5% in 2024-25, compared to 82.46% in 2023-24 and 85.66% in 2022-23. Data from the IRDAI’s Bima Bharosa portal indicates that 1,37,361 grievances related to general and health insurance were reported in FY25, with approximately 93% resolved within the same financial year.
Despite these advancements, some claims are still being rejected due to policy-related conditions such as exceeding the sum insured, co-payment clauses, sub-limits, deductibles, room rent caps, and non-medical expenses. The regulator has implemented various measures to enhance transparency and streamline the claims process, aiming to foster greater trust among policyholders and establish a more efficient and dependable health insurance system in the country.
