Insurance Samadhan tackles India's claims grievance crunch

Insurance Samadhan has processed more than 20,000 insurance grievance cases in India since launching in 2018. Co-Founder and Chief Operating Officer Shilpa Arora said the company operates in a market where complaints are rising, and dispute resolution remains slow.

She linked its work to wider strains in India's insurance system, where consumer complaints have increased, and formal redress channels face long delays. Only 18 ombudsmen handle insurance disputes nationwide, leaving policyholders in major cities waiting several months to as long as a year for hearings, she said.

The figures come as India's insurance industry faces growing scrutiny over claims handling and sales practices. A Deloitte report cited by Arora showed grievances rose to 257,000 in FY24-25 from 215,000 a year earlier, with claims-related disputes and mis-selling accounting for nearly 69% of complaints. The report also noted that pending cases on the Bima Bharosa portal had climbed to more than 10,000.

Arora, who spent 28 years in insurance before starting the company, said two problems continue to undermine confidence in the sector. One is the use of automated systems in health claims that produce rejection language policyholders struggle to understand. The other is weak implementation on the ground, including some hospitals refusing to accept government-backed schemes and continuing to mis-sell despite regulatory oversight.

"Insurance in India is operating in a trust deficit market where mis-selling has happened, claim rejections have happened, and the system makes it nearly impossible for people to understand what went wrong," Arora said. "When hospitals submit discharge summaries, automated systems analyze documentation using parameters designed to identify rejection grounds rather than facilitate legitimate payments."

Claims Pressure

Her comments highlight a structural imbalance in claims disputes. Insurers typically arrive at hearings with legal representation and complete records, while many policyholders appear alone and without a clear understanding of insurance terminology, procedure, or the documents needed to support a complaint.

"There are three entities involved - hospital, insurance company, and TPA desk. A policyholder cannot understand on their own what to write to the insurer. The policy terms are complex, the discharge summary is complex. Not everyone in India is able to represent their case well," Arora said.

In response, Insurance Samadhan has built software to assess whether a claim is valid, prepare letters and complaint documents, and help customers prepare for ombudsman hearings. It charges 18% plus GST only when money is recovered for a customer.

The business gained public attention after appearing on the first season of Shark Tank India. Arora said that exposure broadened recognition and made consumers more willing to share the sensitive policy and medical documents needed to pursue disputes. The company now says it is valued at ₹175 crore.

Low Penetration

The company's growth comes against a backdrop of persistently low insurance penetration. Deloitte said gross premiums in India have risen almost sixfold over the past decade to ₹11.9 lakh crore in FY24-25, but penetration has edged up only from 3.3% to 3.7%. That suggests premium growth has not translated into a broad expansion of protection coverage.

The report also found that claims adjudication at many insurers still relies heavily on manual work, contributing to nearly 60% of operational costs and extending turnaround times. For consumers, that can mean a system that is both hard to navigate and slow to resolve when a claim is contested.

Arora said adoption is also constrained by the way insurance products are sold. She pointed to cases where customers buy cover as a savings or investment product rather than as protection, and to senior citizens being sold equity-linked plans that may not suit their risk profile. She also said some corporate workers rely entirely on employer-provided cover and do not maintain individual policies.

Another challenge lies in public health schemes. Arora said some hospitals have refused treatment under Ayushman Bharat because of delays in government reimbursement, adding another layer of uncertainty for patients expecting cashless care.

Regulatory Focus

Regulators have begun to focus more closely on how insurance is distributed. Recent guidance from the Reserve Bank of India places responsibility on banks to show that insurance sales were appropriate, even where customer consent paperwork exists. That matters because banks distribute more than half the business for some life insurers and can earn commissions of as much as 65% to 70% on first-year premiums, according to the Deloitte report.

Insurance Samadhan said its customers are concentrated in Maharashtra, Ahmedabad, Uttar Pradesh, and Delhi. Alongside grievance resolution, it is developing a consumer-facing application designed to store insurance documents and support claims filing for families.

For now, its core business remains rooted in a simple gap in the market: many policyholders do not know how to challenge a rejected claim, while the formal system available to them is still limited to 18 ombudsmen for the entire country.