Govt asks public sector general insurers to prioritise profitability, cut claim ratios
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The Finance Ministry on Wednesday asked public sector general insurance companies (PSGICs) to sharpen their focus on profitable lines of business and take measures to bring down incurred claim ratios, as it reviewed their financial and business performance for 2025-26.
Department of Financial Services (DFS) Secretary Sanjay Lohiya, who chaired the performance review meeting, also called for greater use of technology and faster digitalisation while keeping expenditure on information technology and other digital initiatives under control.
“The Secretary advised the PSGICs to strengthen their focus on profitable lines of business and adopt suitable measures to bring down the Incurred Claim Ratio (ICR),” the Ministry of Finance said in a statement.
The ICR indicates the proportion of premiums earned by an insurer that is utilised towards settling claims and is an important measure of underwriting performance. A higher ratio can put pressure on an insurer’s profitability.
The government also asked public sector insurers to step up customer outreach and improve awareness of insurance products, particularly in markets where coverage remains limited.
“The Secretary further emphasised the need to improve communication, publicity and customer outreach, including through social media and other platforms, to enhance awareness about various insurance products and the outreach of the PSGICs in underserved segments and areas,” the ministry said.
Lohiya further advised the companies “to improve insurance penetration and density while reducing protection gaps”, underscoring the need for public sector insurers to expand their footprint beyond established markets.
Govt seeks common KPI framework across insurers
The review also placed emphasis on strengthening performance monitoring through a common framework for the public sector general insurance companies.
“The Secretary emphasised the need to strengthen performance monitoring through a robust and standardised KPI framework across PSGICs,” the ministry said.
According to the ministry, the framework should facilitate a consistent and comparable assessment of both financial and non-financial performance across companies, with the KPIs to be reviewed every quarter.
Customer service was another key focus, with Lohiya asking insurers to ensure faster and better resolution of complaints. The ministry said he advised PSGICs to ensure “expeditious and quality redressal of customer grievances.”
The meeting reviewed underwriting performance across various lines of business, key performance indicators, digital initiatives and other operational issues.
The meeting was attended by the CMDs of National Insurance Company Ltd, United India Insurance Company Ltd, Oriental Insurance Company Ltd and Agriculture Insurance Company of India Ltd, along with senior officials of New India Assurance Company Ltd and the DFS.