India’s Health Insurance Sector Grows 9%: IRDAI Tightens Claims Timelines

India’s health insurance sector is maintaining steady momentum, expanding at an annual rate of ~9%, with total premium collections crossing ₹1.2 lakh crore in 2024–25. This indicates a shift in consumer behaviour fueled by greater awareness, wider access to healthcare financing, and an increasing need for financial security against rising medical costs.

Stronger Systems for Faster Claims

To improve efficiency and deliver quicker support to policyholders, the Insurance Regulatory and Development Authority of India (IRDAI) has set clear timelines for processing cashless health insurance claims.

• Pre-authorization: Within one hour
• Final approval: Within three hours

These timelines are designed to reduce uncertainty and ensure patients receive timely medical care without administrative delays.

What’s Driving Premium Growth?

The upward trend in health insurance premiums is being shaped by multiple factors, including an ageing population, higher coverage needs, and the inclusion of more comprehensive policy features.

Under its 2024 regulatory framework, IRDAI has emphasised fair and transparent pricing. Insurers are required to base premiums on relevant risk factors while ensuring products remain viable and customer-centric.

Claims Settlement Trends

Recent data reflect a broadly stable claims settlement landscape:

• 2022–23: 85.66%
• 2023–24: 82.46%
• 2024–25: 87.50%

The improvement in 2024–25 suggests a stronger push towards efficient claims handling and better service delivery.

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According to IRDAI’s Bima Bharosa portal, 1,37,361 general and health insurance grievances were reported in FY 2024–25. Of these, 93% were resolved within the same financial year, indicating progress in grievance redressal mechanisms.

Why Some Claims Get Rejected?

Claim rejections or partial disallowances are typically linked to specific policy terms and conditions. Common reasons include:

• Exhaustion of the sum insured
• Co-payment clauses
• Sub-limits on treatments
• Deductibles in top-up plans
• Room rent caps and proportionate deductions
• Exclusion of non-medical expenses

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