comparative analysis of performance of public and...

CHAPTER VII

COMPARATIVE ANALYSIS OF PERFORMANCE OF PUBLIC AND PRIVATE INSURERS IN RELATION TO

CUSTOMER GRIEVANCE REDRESSAL

“A customer is the most important visitor on our premises. He is not dependent on us. We are dependent on him. He is not an interruption in our work. He is the purpose of it. He is not an outsider in our business. He is part of it. We are not doing him a favour by serving him. He is doing us a favour by giving us an opportunity to do so”

– Mahatma Gandhi (Baradhwaj, 2011).

The “Customer” is the most important person on the insurer’s premises. In a

liberalized insurance market, the customer has become the “central” point around

whom all the activities of the insurance companies move. Excellent customer service

is the key to continued survival in today’s competitive era. An efficient insurer is one

who has an effective procedure for redressing the complaints of the dissatisfied

customers in order to retain them for long term and also to attract the new customers

by maintaining the reputation of the company. Customer grievance redressal is a pre

condition for the success of any company. When the complaints of the insurers would

be effectively handled inside the organization by the insurer, the customers would

need not to move towards the external agencies. Moreover the target of today insurer

is not only to maximize their revenue but also to lower down the process costs and

still attracting more customers to the organization. To achieve this, proactive

improvements in service and claims management are in great demand.

Meaning of Grievance/Complaint

A “Grievance/Complaint” is defined as any communication that expresses

dissatisfaction about an action or lack of action, about the standard of

service/deficiency of service of an insurance company and/or any intermediary or

asks for remedial action. (Source: IRDA Guidelines for Grievance Redressal by

326

Insurance Companies). In other words, Complaint may be considered as

dissatisfaction arisen on account of a deficiency of service provided to the customer

by the insurance provider. The “Complaint” may be defined as a grievance which

could be resolved internally within the organization (Johri, 2007).

After the entry of private companies in the year 2000-01, there has been

addition in the variety of products offered to the customers. Whatever may be the

nature of the service or product purchased, every such a deal should come up to the

expectations and needs of the customer. Same is the case with the Insurance services.

Grievances arises where there is a certain level of expectation by a customer and the

reality does not match it.

Why Handling Customer Grievances is Important

Customer Grievance Redressal is an important function of an efficient,

responsive and transparent insurance market. The basic purpose behind a Grievance

Redressal mechanism is to provide a platform to the policyholders to lodge their

complaints related to various services they receive from the insurers. It bridges the

communication gap between the insurers and insured and provides policyholders a

platform through which they can get their grievances redressed in a timely and

transparent manner.

The most important rationale behind the relevance of grievance redressal can

be defined in simple words. If someone is complaining then it is sure that there has

been some problem in one’s product/ service that is causing a complaint. Moreover it

is a confirmed fact that a policyholder who is not satisfied with one’s product/ service

will spread the message more early than a satisfied policyholder spreading the

message of his happiness. This is one of the essential reasons why policyholder

grievance redressal has to be laid at the top most concern, from the perspective of

insurance business. If an insurance company has got effective grievance redressal

mechanism, it means just not winning back a losing customer but also gaining a more

loyal customer. In spite of utmost care taken by the insurer the grievance is the fact

327

which could not be avoided. It is also felt that a customer grievance is not always a

bad experience due to the reason that if managed effectively it could prove to be a

valuable asset for the companies. A customer grievance is one of the best opportunity/

tool for turning unhappy customers into loyal ones.

The key benefits of the Effective Grievance Redressal are as follows:

• It provides scope for improving service quality.

• It helps understand better the customers’ needs.

• It tries to keep customer happy and loyal.

• It brings more customers in addition to retention of existing customers.

• An effective grievance management system can save the insurers unnecessary

costs.

• A well equipped insurer can see an opportunity in grievance redressal and can

win back the customer goodwill and loyalty by promptly attending to the

policyholder’s grievances.

CONSUMER GRIEVANCE REDRESSAL SYSTEM FOR INSURANCE

CUSTOMERS IN INDIA:

The following figure shows the options available to the Indian customer in order to

get the solution of the grievance/ complaint:

328

Figure 7.1: Consumer Grievance Redressal System in Indian Insurance Sector

(Source: Jothi and Gupta, 2012)

Grievances can be internal – reported and resolved within the insurance company

as well as external - filed straight away with the external bodies such as the regulators or

consumer forums, etc. There is a possibility that some internal complaints might go to the

external bodies, if the resolution is not satisfactory to the parties involved. The insurers

329

must be sensitive enough to identify the potential areas and moments in the policy life

cycle which are more grievances prone, in the first place.

• In House Redressal

There are various approaches to grievance redressal among the various insurers

prevailing in the market. Email facility, Grievance redressal policy, 24 hour call centers,

Grievance Redressal Register, Redressal Cells, Suggestion/ Complaint boxes, Facility to

meet the manager on particular days, Branch/ Unit offices are some of the approaches

usually followed by the insurers.

• External Grievance Handling

If the Policyholder is not satisfied with the Solution provided by the insurance

company, he also has the opportunity to lodge the compliant to the external bodies. These

bodies could be the IRDA Grievance Redressal Cell, Ombudsman, Consumer Court,

Civil Court and Supreme Court.

REDRESSAL MECHANISM WITHIN THE INDUSTRY

Apart from the in-house redressal system, the general insurance industry itself has

its own consumer grievances redressal mechanism. Following are the major systems of

grievances redressal within the insurance industry:

Grievance Redressal Cell: The IRDA has a grievance redressal cell which plays a

facilitative role by taking up complaints against insurers with the respective companies

for speedy resolution. The IRDA however does not adjudicate on complaints. Only cases

of delay/ non-response regarding matters relating to policies and claims are taken up by

the Cell with the insurers for speedy disposal.

Insurance Ombudsman: The institution of Insurance Ombudsman was set up under the

Redressal of Public Grievances Rules, 1998 by Government of India with the purpose of

quick disposal of the grievances of the insured customers and to mitigate their problems

involved in redressal of those grievances. Complaints pertaining to reputation of claims

totally or partially, delay in settlement of claims, any dispute on the legal construction of

330

the policies in so far as such disputes relate to claims, disputes regarding premiums paid/

payable and non-issue of insurance documents are entertained by the Ombudsman.

In order to save both parties, the insured and the insurer, from expensive and

time–consuming litigation, the idea of “Alternative Dispute Resolution” (ADR) as an

alternative to litigation is constantly gaining ground. Alternative Dispute Resolution is to

be perceived as important machinery before going for full–scale litigation. The most

commonly used methods of ADR are negotiation, mediation, conciliation, and arbitration.

Negotiation: In negotiation participation is voluntary and there is no third party who

facilitates the resolution process or imposes a resolution.

Mediation: There is a third party under mediation, called a mediator, who facilitates the

resolution process, but does not impose a resolution on the parties. The meditation is

used for resolving the difference of opinion in order to facilitate either party to see reason

in the presence of the mediator.

Conciliation: Conciliation is a process similar to mediation but often it is not a voluntary

process. Conciliation is a system where disputes are settled by mutual concession of the

parties through good offices of conciliators.

Arbitration: In arbitration, participation is typically voluntary, and there is a third party

who, as a private judge, imposes a resolution. Arbitrations often occur because parties to

contracts agree that any future dispute concerning the agreement will be resolved by

arbitration. Nowadays arbitration has become more popular method of ADR and

mediation and conciliation is limited to labor disputes.

GRIEVANCE REDRESSAL PROCEDURE INSIDE INSURANCE COMPANY:

According to the Regulations of IRDA every insurer shall have a system and a

procedure for receiving, registering and disposing of grievances in each of its offices.

This and all other relevant details along with details of Turnaround Times (TATs) shall

be clearly laid down in the policy. While insurers may lay down their own TATs, they

shall ensure that the following minimum time-frames are adopted:

331

(a) An insurer shall send a written acknowledgement to a complainant within 3

working days of the receipt of the grievance.

(b) The acknowledgement shall contain the name and designation of the officer who

will deal with the grievance.

(c) It shall also contain the details of the insurer’s grievance redressal procedure and

the time taken for resolution of disputes.

(d) Where the insurer resolves the complaint within 3 days, it may communicate the

resolution along with the acknowledgement.

(e) Where the grievance is not resolved within 3 working days, an insurer shall

resolve the grievance within 2 weeks of its receipt and send a final letter of

resolution.

(g) Where, within 2 weeks, the company sends the complainant a written response

which offers redress or rejects the complaint and gives reasons for doing so,

(i) the insurer shall inform the complainant about how he/she may pursue the

complaint, if dissatisfied.

(ii) the insurer shall inform that it will regard the complaint as closed if it does not

receive a reply within 8 weeks from the date of receipt of response by the

insured/policyholder.

(Source: 27th July 2010, IRDA Guidelines for Grievance Redressal by Insurance Companies Ref: 3/CA/GRV/YPB/10-11)

Any failure on the part of insurers to follow the above-mentioned procedures and

time-frames would attract penalties by the Insurance Regulatory and Development

Authority.

It may be noted that it is necessary for each and every office of the insurer to

adopt a system of grievance registration and disposal.

PERFORMANCE OF GENERAL INSURERS IN HANDLING THE

COMPLAINTS

The year wise and insurer wise analysis and interpretation have been given below

in the table 7.1:

332

Table 7.1

Complaints received, Disposed off and Pending

New India

2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12

Pending as on 31stMar(Beginning) 431 382 328 310 303 586 548

Reported during the year 1418 825 694 769 1162 4008 3302

Total number of complaints 1849 (100)

1207 (100)

1022 (100)

1079 (100)

1465 (100)

4594 (100)

3850 (100)

Resolved during the Year 1467 (79.34)

879 (72.82)

712 (69.66)

776 (71.91)

879 (60)

4046 (88.07)

3549 (92.18)

Pending as on 31st Mar(Ending) 382 328 310 303 586 548 301

Oriental

2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12




2238 (100)

2526 (100)

2116 (100)

2526 (100)

4490 (100)

7072 (100)


2114 (94.45)

2429 (96.15)

2047 (96.73)

2429 (96.15)

3438 (76.57)

6402 (90.52)


333

National

2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12




516 (100)

2478 (100)

2069 (100)

2428 (100)

9937 (100)

15390 (100)


268 (51.93)

2064 (83.29)

1778 (85.93)

2131 (87.76)

9202 (92.60)

14116 (91.72)


United

2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12




1500 (100)

1308 (100)

1911 (100)

1480 (100)

5621 (100)

5083 (100)


1158 (77.2)

1060 (81.03)

1659 (86.81)

1409 (95.20)

5022 (89.34)

4747 (93.38)


Royal Sundram

2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12



334


22669 (100)

27364 (100)

31707 (100)

41644 (100)

31188 (100)

6080 (100)


21077 (92.97)

26858 (98.15)

30497 (96.18)

40074 (96.22)

30988 (99.35)

6039 (99.32)


Bajaj Allianz 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12Pending as on 31stMar(Beginning) Nil Nil Nil Nil Nil 29 50 Reported during the year 22 73 112 149 15723 8122 13436 Total number of complaints 22

(100) 73 (100)

112 (100)

149 (100)

15723 (100)

8151 (100)

13486 (100)

Resolved during the Year 22 (100)

73 (100)

112 (100)

149 (100)

15694 (99.81)

8101 (99.38)

13336 (98.88)

Pending as on 31st Mar(Ending) Nil Nil Nil Nil 29 50 150 Reliance 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12Pending as on 31stMar(Beginning) Nil Nil 1 2 0 26 15Reported during the year Nil 13 102 355 288 961 10226 Total number of complaints Nil 13

(100) 103 (100)

357 (100)

288 (100)

987 (100)

10241 (100)

Resolved during the Year Nil 12 (92.30)

101 (98.05)

357 (100)

262 (90.97)

972 (98.48)

10204 (99.63)

Pending as on 31st Mar(Ending) Nil 1 2 0 26 15 37

335

IFFCO Tokio

2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12

Pending as on 31stMar(Beginning) Nil 55 128 104 147 168 187



673 (100)

617 (100)

1187 (100)

1377 (100)

4427 (100)

5185 (100)


545 (80.98)

513 (83.14)

1040 (87.61)

1209 (87.79)

4240 (95.77)

5173 (99.76)


ICICI Lombard

2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12




1607 (100)

2197 (100)

2963 (100)

3243 (100)

13862 (100)

22345 (100)


1587 (98.75)

2172 (98.86)

2933 (98.98)

3225 (99.44)

13480 (97.24)

22233 (99.49)

Pending as on 31st Mar(Ending) 16 20 25 30 18 382 112(Source: Author’s Own Calculations) Data of previous years were not available from the websites; moreover the Data of TATA AIG

were not at all available.

336

Taking 2005-06 as the base year, it is seen that the total number of complaints

reported to both the public and private insurers in 2011-12 has increased. Reasons for the

increase in number of complaints may be the increase in number of policies underwritten

and the increase in awareness among the customers regarding their rights due to the

public awareness initiatives taken by IRDA. The insurer wise analysis of the

performance in terms of complaints handling depicts that all the public sector insurers

have marked an increase in settling the complaints over the study period. New India

Insurance Company has been most efficient in 2011-12 when its rate of solving the

complaints has been marked maximum i.e. 92.18% in comparison to the rest of the years.

Similarly Oriental Insurance Company has been solving the maximum number of

complaints in 2008-09 marking the rate of 96.73%, National Insurance Company has

been solving the maximum number of complaints in 2010-11 marking the grievance

solution rate of 92.60% and United India Insurance Company has been solving the

maximum number of complaints in 2009-10 marking the grievance solution rate of

95.20%. Among all the public sector insurers Oriental Insurance Company has been the

most efficient as it is consistent in solving grievances over the study period. Whereas, the

private insurers have also been marking a positive trend regarding the settlement of the

complaints. Royal General Insurance Company has been most efficient in 2010-11 when

the rate of solving the complaints has been marked maximum i.e. 99.35% in comparison

to the rest of the years. Similarly Bajaj General Insurance Company has been solving the

maximum number of complaints in 2005-06, 2006-07, 2007-08 and 2008-09 marking the

solution rate of 100%, Reliance General Insurance Company, IFFCO General Insurance

Company and ICICI Lombard General Insurance Company has solved the maximum

number of complaints in 2008-09 with a solution rate of 100%, in 2011-12 with a

solution rate of 99.76% and in 2011-12 with a solution rate of 99.49% respectively. The

whole analysis depict that as the rate of handling the complaints of the private insurers

has improved over time. The year wise analysis states that the maximum number of

complaints has been handled effectively by the private insurers in all the years. In the

year 2005-06, 2006-07, 2007-08, 2008-09 Bajaj Allianz General Insurance Company

depicting the rate of 100% has been the most efficient. In the year 2008-09 Reliance

General Insurance Company has also become the most efficient by solving all the

complaints in hand. Of all the insurers Bajaj Allianz General Insurance Company has

337

been the most efficient of all. The whole of the year wise analysis states that the private

insurers have been more efficient in comparison to the public insurers in effectively

handling the complaints of their customers.

Moreover, Mann Whitney Test has been used to determine whether there is a

significant difference in the complaints solution rate of public and private sectors. The

hypothesis framed is as follows:

(a) There is no significant difference in the complaints solution rate of public and

private sectors (H0);

(b) There is a significant difference in the complaints solution rate of public and


Table 7.2

Test of Significance

Test Ratio Z Value

Asymp. Sig (2-tailed)

Mann-Whitney Test

(Total number of Grievances solved during the year/ Total number of Grievances in the

year) ratio

-4.663

.000

The results of Mann-Whitney test indicate that there is a significant difference in

the complaints solution rate of public and private insurers.

Table 7.3

Ranking of Insurers on the basis of Grievance Redressal Rate

05-06 06-07 07-08 08-09 09-10 10-11 11-12 Total Average Rank

New 5 8 9 9 9 8 7 55 7.85 9 Oriental 4 3 5 4 4 9 9 38 5.42 5 National 6 9 6 8 8 6 8 51 7.28 8 United 7 7 8 7 5 7 6 47 6.71 7 Royal 3 4 3 5 3 2 4 24 3.42 4 Bajaj 1 1 1 1.5 1 1 5 11.5 1.64 1 Reliance - 5 4 1.5 6 3 2 21.5 3.07 3 IFFCO 8 6 7 6 7 5 1 40 5.71 6 ICICI 2 2 2 3 2 4 3 18 2.57 2

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The above table states the ranking of insurers on the basis of the complaints solved by them during the years under consideration. Bajaj Allianz General Insurance Company has been the most efficient Insurers in solving the complaints of its policyholders during the whole study. ICICI Lombard General Insurance Company and Reliance General Insurance Company are occupying the second and the third position respectively. The analysis shows that the Public Sector General Insurers are occupying the lowest position in redressing the complaints of its customers. More effective call centre services, well organized Grievance Redressal Committees, valuable training module on customer services, efficient service quality councils which meets every month through video call to discuss service parameters, less documentation requirements as compared to its public counterparts, centralized structure and system of operations may be some of the prominent reasons for the effective management of the private insurers customers grievance redressal.

Table 7.4

Total number of complaints received and resolved over the time (Public Sector)

05-06 06-07 07-08 08-09 09-10 10-11 11-12 Total 5865 5461 7334 7175 7899 24642 31395 Solved 4693

(80.01) 4419 (80.91)

6265 (85.42)

6260 (87.24)

6848 (86.69)

21708 (88.09)

28814 (91.77)

Pending 1172 1042 1069 915 1051 2707 2581 The above table indicates that though the total number of complaints has increased

with the time, the percentage of solved complaints has also increased.

Table 7.5

Total number of complaints received and resolved over the time (Private Sector)

05-06 06-07 07-08 08-09 09-10 10-11 11-12 Total 13562 25035 30393 36363 62275 58615 57337 Solved 12525

(92.35) 23294 (93.04)

29756 (97.90)

34976 (96.18)

60464 (97.09)

57781 (98.57)

56985 (99.38)

Pending 1037 1741 637 1387 1811 834 352

The above table depicts that though the total number of complaints has increased

with the time, the percentage of solved complaints has also increased. On comparing

339

Table 7.4 and 7.5 it is evident that the increase in the rate of solution of the complaints of

private sector is higher than their public counterparts.

PERFORMANCE OF INSURERS IN HANDLING GRIEVANCES ESCALATED

TO IRDA CELL:

Policyholder protection is the prime mission of IRDA and all its activities revolve

around achieving this even while it works towards ensuring a healthy all round

development of the Insurance Sector. The main objectives of the consumers protection is

to ensure better protection of consumers and is intended to provide simple, speedy and

inexpensive redressal to the consumers’ grievances. The Grievances Cell of the Authority

(IRDA) receives grievances from the policyholders against insurance companies. Such

complaints are forwarded to the companies for resolution at their end. The insurance

companies are required to keep the Grievances Cell of IRDA informed about the status of

respective grievances and whether the complaints have been resolved or otherwise

(Ibrahim and Rehman, 2012).

The Authority’s objective is to handle a consumer complaint so that it results in

insurance companies and their agents acting in accordance with the Laws and

Regulations. In handling consumer complaints, the Authority seeks to work with the

industry and the consumers on the most common reasons for complaints and if possible

remedy the issues in such a manner that future complaints do not occur. This would mean

that complaints in those targeted areas should decrease. From the Authority’s point of

view, constant communication and feedback with consumers, the industry and the

intermediaries is crucial.

NEW INITIATIVES TAKEN BY REGULATOR:

The IRDA itself set up a Consumer Grievances Cell that started functioning with

effect from January, 2003. The prime objective of the Cell is to assist policyholders in getting

an early resolution of their grievances. The redressal mechanism is an administrative one.

The focus is on the decision making at the company level (Bharath, 2004).

The Consumer Affairs Department of IRDA handles policyholder grievances,

apart from carrying out awareness campaigns on insurance. The department looks into

complaints from policyholders against life and non-life insurance companies. Prospects

340

and policyholders are advised to first file their complaints with the respective insurance

companies. If the insurance companies do not attend to the complaints received within

the stipulated turnaround time of 15 days or in case the complainants are not satisfied

with the resolution, they may escalate the complaint to IRDA. The Authority facilitates

the process of resolution by taking up the matter with the insurance companies to

strengthen the redressal framework. IRDA also examines the complaints from a

regulatory perspective and takes steps as deemed fit.

The IRDA Grievance Call Centre (IGCC) receives and registers complaints through a

toll free number. The IGCC interfaces with the Integrated Grievance Management System

(IGMS), the online system for grievance management that not only offers a gateway for

complainants to register and track grievances but is also a tool for the Authority to monitor

disposal of grievances by insurance companies. Further, the requirement of insurance

companies to have Board approved grievance redressal policies; compliance requirements

relating to IRDA guidelines for grievance redressal and the requirement under the corporate

governance guidelines to have a policyholder protection committee as a mandatory

committee have gone a long way in protecting the interests of policyholders. In addition, the

IGMS provides a central repository of complaints across the industry and this facilitates both

IRDA as well as the insurance companies to carry out “root-cause” analysis of grievances to

identify systemic and policy related issues. This has also enabled the Authority to identify the

concerns of policyholders and to initiate corrective action.

IGMS will create a gateway for policyholders to register complaints with

Insurance Company first and if need be escalate them to the IRDA Grievance Cells. A

complaint registered through IGMS will flow simultaneously to the Insurer’s system as

well as the IRDA repository. Updation of the status by the Insurers would automatically

be mirrored in the IRDA system. Thus, IGMS will provide a standard platform to all

insurers to resolve policyholder grievances and to provide IRDA with a tool to monitor

the effectiveness of the grievance redressal system of Insurers.

ANALYSIS AND INTERPRETATION OF RESULTS:

In this section an attempt has been made to analyze the performance of insurers in

handling the grievances escalated to the IRDA Cell in solving the complaints against both

the public sector insurers and private sector insurers.

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Table 7.6

Details of Complaints received, disposed off and remained outstanding

New India

2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 11-12

Pending as on 31stMar(Beginning) 132 441 145 148 189 272 220 177 384

Reported during the year 748 433 371 336 366 280 338 800 1651


874 (100)

516 (100)

484 (100)

555 (100)

552 (100)

558 (100)

977 (100)

2035 (100)


729 (83.40)

368 (71.31)

295 (60.95)

283 (50.99)

332 (60.14)

381 (68.27)

593 (60.69)

1975 (97.05)

Pending as on 31st Mar(Ending) 441 (50.11)

145 (16.59)

148 (28.68)

189 (39.04)

272 (49.00)

220 (39.85)

177 (31.72)

384 (39.30)

60 (2.95)

Oriental

2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 11-12

Pending as on 31st Mar(Beginning) 89 123 83 38 21 72 44 81 436



406 (100)

306 (100)

202 (100)

293 (100)

225 (100)

214 (100)

686 (100)

4391 (100)


323 (79.55)

268 (87.58)

181 (89.60)

221 (75.42)

181 (80.44)

133 (62.14)

250 (36.44)

3923 (89.34)


83 (20.44)

38 (12.41)

21 (10.39)

72 (24.57)

44 (19.55)

81 (37.85)

436 (63.55)

468 (10.65)

342

National

2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 11-12




702 (100)

665 (100)

490 (100)

513 (100)

463 (100)

405 (100)

828 (100)

2426 (100)


399 (56.83)

497 (74.73)

318 (64.89)

295 (57.50)

327 (70.62)

260 (64.19)

643 (77.65)

1792 (73.87)


303 (43.16)

168 (25.26)

172 (35.10)

218 (42.49)

136 (29.37)

145 (35.80)

185 (22.34)

634 (26.13)

United

2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 11-12




661 (100)

545 (100)

482 (100)

486 (100)

358 (100)

319 (100)

764 (100)

3743 (100)


486 (73.52)

349 (64.03)

347 (71.99)

368 (75.72)

316 (88.26)

298 (93.14)

598 (78.27)

3420 (91.37)


175 (26.47)

196 (35.96)

135 (28.00)

118 (24.27)

42 (11.73)

21 (6.58)

166 (21.73)

323 (8.62)

343

Royal Sundram

2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 11-12




27 (100)

25 (100)

54 (100)

74 (100)

97 (100)

75 (100)

126 (100)

5884 (100)


26 (96.29)

25 (100)

45 (83.33)

62 (83.78)

77 (79.38)

56 (74.66)

122 (96.82)

5884 (100)

Pending as on 31st Mar(Ending) 0 (nil)

1 (3.70)

0 (nil)

9 (16.67)

12 (16.21)

20 (20.61)

19 (25.33)

4 (31.7)

0 (0)

Bajaj Allianz

2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 11-12




35 (100)

35 (100)

77 (100)

115 (100)

167 (100)

143 (100)

208 (100)

11728 (100)


29 (82.85)

33 (94.28)

72 (93.50)

91 (79.13)

129 (77.24)

119 (83.21)

177 (85.09)

11727 (99.99)


6 (17.14)

2 (5.71)

5 (6.49)

24 (20.86)

38 (22.75)

24 (16.78)

31 (14.90)

1 (.01)

344

TATA AIG

2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 11-12




29 (100)

44 (100)

94 (100)

169 (100)

229 (100)

110 (100)

126 (100)

4332 (100)


20 (68.96)

35 (79.54)

60 (63.82)

127 (75.14)

203 (88.64)

108 (98.18)

125 (99.20)

4331 (99.97)


9 (31.03)

9 (20.45)

34 (36.17)

42 (24.85)

26 (11.35)

2 (1.81)

1 (.80)

1 (.02)

Reliance

2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 11-12




4 (100)

1 (100)

13 (100)

106 (100)

356 (100)

360 (100)

995 (100)

9715 (100)


3 (75)

1 (100)

6 (46.15)

82 (77.35)

282 (79.21)

325 (90.27)

833 (83.71)

9713 (99.97)


1 (25)

0 (nil)

7 (53.84)

24 (22.64)

74 (20.78)

35 (9.72)

162 (16.28)

2 (0.020)

345

IFFCO Tokio 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 11-12Pending as on 31st Mar(Beginning) 1 0 3 0 8 26 16 22 38Reported during the year 9 16 8 28 61 55 75 142 4099 Total number of complaints 10

(100) 16 (100)

11 (100)

28 (100)

69 (100)

81 (100)

91 (100)

164 (100)

4137 (100)


13 (81.25)

11 (100)

20 (71.42)

43 (62.31)

65 (80.24)

69 (75.82)

126 (76.82)

4137 (100)


3 (18.75)

0 (nil)

8 (28.57)

26 (37.68)

16 (19.75)

22 (24.17)

38 (23.17)

0 (0)

ICICI Lombard 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 11-12Pending as on 31st Mar(Beginning) 2 0 1 4 37 37 25 16 4

Reported during the year 11 34 76 228 371 384 315 449 23731 Total number of complaints 13

(100) 34 (100)

77 (100)

232 (100)

408 (100)

421 (100)

340 (100)

465 (100)

23735 (100)


33 (97.05)

73 (94.80)

195 (84.05)

371 (90.93)

396 (94.06)

324 (95.29)

461 (99.13)

23731 (99.98)


1 (2.94)

4 (5.19)

37 (15.94)

37 (9.06)

25 (5.93)

16 (4.70)

4 (.860)

4 (0.061)

(Source: Author’s Own Calculations) Note: The data relating to the year 2002-03 has not been taken into consideration as Consumer Grievances Cell has started functioning with effect from January, 2003.

346

Taking 2003-04 as the base year, it is seen that the total number of complaints

reported during the years to all the four public sector and private sector insurers has

increased. The insurer wise analysis of the performance in terms of complaints handling

depicts that all the public sector insurers have marked an increase in settling the

complaints over the study period. New India Assurance Company has been most efficient

in 2011-12 when the rate of solving the complaints has been marked maximum i.e.

97.05% in comparison to the rest of the years. Similarly Oriental Insurance Company has

been solving the maximum number of complaints in 2006-07 marking the rate of 89.60%,

National Insurance Company has been solving the maximum number of complaints in

2010-11 marking the rate of 77.65% and United India Insurance Company has been

solving the maximum number of complaints in 2009-10 marking the rate of 93.14%.

Whereas the private insurers have also been marking an increase regarding the settlement

of the complaints. Royal General Insurance Company has been most efficient in 2003-04,

2005-06 and 2011-12 when the rate of solving the complaints has been marked maximum

i.e. 100% in comparison to the rest of the years. Similarly Bajaj General Insurance

Company has been solving the maximum number of complaints in 2003-04 marking the

rate of 100%, TATA Insurance Company has been solving the maximum number of

complaints in 2011-12 marking the rate of 99.97%, Reliance General Insurance Company

in 2003-04 and 2005-06 and IFFCO General Insurance Company has solved the

maximum number of complaints in 2003-04, 2005-06 and 2011-12. In these the years the

insurers have solved all the complaints in hands. Similarly ICICI Lombard has solved all

the complaints in hand in the year 2003-04. The year wise analysis states that the

maximum number of complaints has been handled effectively by the private insurers in

all the years. It is the year 2003-04 when the maximum number of private insurers i.e.

Royal Sundram General Insurance Company, Bajaj General Insurance Company,

Reliance General Insurance Company, IFFCO Tokio General Insurance Company and

ICICI Lombard General Insurance Company has depicted the rate of 100% efficiency.

Similarly in 2004-05 ICICI Lombard General Insurance Company has depicted the

97.05% efficiency, in 2005-06 Royal Sundram General Insurance Company and Reliance

General Insurance Company have solved all the complaints in hand. In 2006-07 Bajaj

General Insurance Company has marked the rate of 93.50%, in 2007-08 and 2008-09

347

ICICI General Insurance Company is the most efficient of all, in 2009-10 and 2010-11

TATA AIG General Insurance Company has depicted the efficiency of 98.18% and

99.20% resp and in the year 2011-12 Royal Sundram and IFFCO have been showing the

solution rate of 100%. The whole of the year wise analysis state that the private insurers

have been more efficient in comparison to the public insurers in effectively handling the

complaints of their customers. The overall improvement of both sectors in effectively

handling the grievances may be attributable to the intervention of the authority in

monitoring the grievance redressal mechanism.

Table 7.7

Ranking of Insurers on the basis of Grievance Redressal Rate

03-04

04-05

05-06

06-07

07-08

08-09

09-10

10-11

11-12

Total Average Rank

New 10 3 9 9 10 10 8 9 7 75 8.3 9

Oriental 7 6 6 2 6 4 10 10 9 60 6.67 8

National 9 10 8 7 9 9 9 7 10 78 8.67 10

United 8 8 10 5 5 3 3 6 8 56 6.22 7

Royal 3 2 2 4 2 6 7 3 1.5 30.5 3.38 2

Bajaj 3 4 5 1 3 8 5 4 3 36 4 3

TATA 6 9 7 8 7 2 1 1 5.5 46.5 5.16 5

Reliance 3 7 2 10 4 7 4 5 5.5 47.5 5.27 6

IFFCO 3 5 2 6 8 5 6 8 1.5 44.5 4.94 4

ICICI 3 1 4 3 1 1 2 2 4 21 2.33 1

The above table states the ranking of insurers on the basis of the complaints

solved by them during the years under consideration. These are the complaints which are

received by the regulator i.e. IRDA and forwarded to the insurers for speedy disposal.

ICICI General Insurance Company has been the most efficient Insurers in solving the

complaints of its customers during the period under consideration. Royal Sundram

General Insurance Company and Bajaj Allianz General Insurance Company are

occupying the second and the third position respectively. The analysis shows that the

348

Public Sector General Insurers are occupying the lowest position in redressing the

complaints of its customers.

Moreover, Mann Whitney Test has been used to determine whether there is a

significant difference in the complaints solution rate of public and private insurers. The

hypotheses framed are as follows:

(a) There is no significant difference in the complaints solution rate of public and


(b) There is a significant difference in the complaints solution rate of public and

private sectors (H1).

Table 7.8

Test of Significance

Test Ratio Z Value

Asymp. Sig (2-tailed)

Mann-Whitney

Test

(Total number of Grievances solved during the year/ Total number of Grievances in the year)

ratio

-5.102

.000

The results of the Mann –Whitney test indicate that there is a significant

difference in the grievance solution rate of public and private insurers.

Table 7.9

Total number of complaints during the year and resolved over the time (Public Sector)

03-04 04-05 05-06 06-07 07-08 08-09 09-10 10-11 11-12

Total 2858 2643 2032 1658 1847 1598 1496 3255 12595

Solved 1786 (79.09)

1937 (73.28)

1482 (72.93)

1141 (68.81)

1167 (63.18)

1156 (72.34)

1072 (71.65)

2084 (64.02)

11110 (88.20)

Pending 1072 706 550 517 680 442 424 1171 1485

349

The above table indicates that though the total number of complaints has

increased with the time, the percentage of solved complaints has also increased.

Table 7.10

Total number of complaints during the year and resolved over the time (Private Sector)

03-04 04-05 05-06 06-07 07-08 08-09 09-10 10-11 11-12

Total 142 145 193 498 941 1351 1119 2084 59531

Solved 141 (99.29)

124 (85.51)

178 (92.22)

398 (79.9)

776 (82.46)

1152 (85.27)

1001 (89.45)

1844 (88.48)

59523 (99.98)

Pending 1 21 15 100 165 199 118 240 8

The above table depicts that though the total number of complaints has increased

with the time, the percentage of solved complaints has also increased. On comparing

Table 7.9 and 7.10 it is apparent that the increase in the rate of solution of the complaints

of private sector is higher than the public counterparts.

INSURANCE OMBUDSMAN

The institution of Insurance Ombudsman was created by the Government of India

Notification dated 11th November, 1998 with the purpose of quick disposal of the

grievances of the insured customers and to mitigate their problems involved in the

redressal of those grievances. This institution is of great importance and relevant for the

protection of interests of policy holders and also in building their confidence in the

system. The institution has helped to generate and sustain the faith and confidence

amongst the customers and insurers.

Power of Ombudsman

Insurance Ombudsman has two types of functions to perform (1) conciliation, (2)

Award making. Insurance Ombudsmen are appointed by the Governing Body and are

empowered to entertain complaints on the following aspects in respect of personal line

insurances:

350

• Any partial or total repudiation of claims by an insurer.

• Any dispute in regard to premium paid or payable in terms of the policy.

• Any dispute on the legal construction of the policies in so far as such disputes

relate to claims.

• Delay in settlement of claims.

• Non-issue of any insurance document to customers after receipt of premium.

Ombudsman's powers are restricted to insurance contracts of value not exceeding

Rs. 20 lakhs. The insurance companies are required to honour the awards passed by an

Insurance Ombudsman within three months.

COMPLAINT HANDLING PROCESS OF OMBUDSMAN

The process of consumer grievance-redress before the Insurance Ombudsman is

shown in Figure 7.2 described below:

Figure 7.2: Process of Customer Grievance Redressal by Insurance Ombudsman

(Source: Sharma

Acceptance by Complainant

, D. 2011)

351

The major steps involved in the CGR process are briefly described below.

i) Nature of Complaint: The complainant must specify the facts which have given

rise to the complaint, the nature and extent of the loss caused to him, and the relief

sought from the Ombudsman (Rule 13). Complaints of the following types come

within the purview of the Insurance Ombudsman:

1. Any partial or total repudiation of claim by an insurer;

2. Any dispute regarding the premium paid, or payable, in terms of the policy;

3. Any dispute on the legal construction of the policy in relation to a claim;

4. Delay in the settlement of claim; and

5. Non-issuance of any insurance document to the customer, after the receipt of

premium (Rule 12).

ii) Filing of Complaint: Any person who has any grievance against an insurer can

either himself or through his legal heir, makes a written complaint, to the

Insurance Ombudsman within whose jurisdiction the branch or the office of the

insurer concerned is located. While filing a complaint to the Insurance

Ombudsman, the consumer must make sure of the following:

1. A written representation has been made to the insurer which (i) has been rejected,

or (ii) has not been replied to within a month, or (iii) he is not satisfied with the

reply;

2. The complaint is made within a year of the disposal of complaint by the insurer;

and

3. The complaint is not on the subject-matter, which has been raised before any

court, consumer forum, or arbitrator (Rule 13).

iii) Hearing by the Ombudsman: The Ombudsman is expected to act as a

counsellor and mediator in the matters which are within his terms of reference,

and, whenever requested to do so, by mutual agreement, by the insured person

and the insurance company. After obtaining full details of the case from the

complainant, the comments of the company thereon and the reasons why the

352

complainant was not satisfied with the reply received from the company, the two

parties are invited for a hearing before the Insurance Ombudsman. Normally, a

case is settled in a single hearing. Adjournment is given only in those cases where

it is absolutely necessary.

iv) Disposal of the Case: The Ombudsman is required to dispose of the complaint

'fairly and equitably’, within a month of receiving the same.

v) Acceptance by Complainant: If the complainant accepts the recommendation of

the Ombudsman, he has to communicate his confirmation within 15 days to the

Ombudsman, stating clearly that the settlement reached is acceptable to him in

totality, in full and final settlement of the claim. After receiving the complainant's

acceptance, the insurer is required to comply with the settlement and inform the

Ombudsman of the compliance.

vi) Passing of Order and Relief Provided: In the case of non-settlement of the

dispute by agreement as stated above, the Ombudsman is required to pass an

award which he thinks to be 'fair'. The amount of compensation awarded,

however, must not exceed Rs.20 lakhs, including the ex gratia payment and other

expenses (Rule 16(2)). The award has to be passed within three months from the

date of receipt of the complaint.

vii) Compliance of Order: As provided under the Rules, if the complainant does not

intimate the acceptance, the award need not be implemented by the insurance

company. There is no other provision relating to the enforcement or execution of

the order passed by the Ombudsman.

viii) Appeal: There is no provision for appeal against the Ombudsman's order.

The details of the complaints received, disposed off and outstanding complaints

by the ombudsman have been as below:

353

Table 7.11

Details of Complaints received, disposed off and remained outstanding

Ahmedabad 2002-03 2003-

04 2004-05

2005-06

2006-07

2007-08

2008-09

2009-10

2010-11

2011-12

Pending as on 31stMar(Beginning)

139 138 158 221 123 60 57 29 44 963

Reported during the year 177 274 338 342 367 406 384 832 1834 1556 Total number of complaints 316 (100) 412

(100) 496 (100)

563 (100)

490 (100)

466 (100)

441 (100)

861 (100)

1878 (100)

2519 (100)


254 (61.65)

275 (55.44)

440 (78.15)

430 (87.75)

409 (87.76)

412 (93.42)

817 (94.88)

915 (48.72)

1864 (73.99)


158 (38.3)

221 (44.55)

123 (21.84)

60 (12.24)

57 (12.23)

29 (6.57)

44 (5.11)

963 (51.27)

655 (26.00)

Bhopal 2002-03 2003-

04 2004-05

2005-06

2006-07

2007-08

2008-09

2009-10

2010-11

2011-12


91 304 371 82 5 5 14 22 39 101

Reported during the year 366 189 219 155 130 188 119 136 126 85 Total number of complaints 457

(100) 493 (100)

590 (100)

237 (100)

135 (100)

193 (100)

133 (100)

158 (100)

165 (100)

186 (100)


122 (24.74)

508 (86.10)

232 (97.89)

130 (96.29)

179 (92.74)

111 (83.45)

119 (75.31)

64 (38.78)

33 (17.74)

354


371 (75.25)

82 (13.89)

5 (2.10)

5 (3.70)

14 (7.25)

22 (16.54)

39 (24.68)

101 (61.21)

153 (82.25)

Bhubaneswar 2002-03 2003-

04 2004-05

2005-06

2006-07

2007-08

2008-09

2009-10

2010-11

2011-12


98 55 74 112 181 204 207 63 26 59


(100) 197 (100)

197 (100)

244 (100)

291 (100)

294 (100)

312 (100)

172 (100)

172 (100)

188 (100)


123 (62.43)

85 (43.14)

63 (25.81)

87 (29.89)

87 (29.59)

249 (79.80)

146 (84.88)

113 (65.69)

110 (58.51)

Pending as on 31st Mar(Ending) 55 (21)

74 (37.56)

112 (56.85)

181 (74.18)

204 (70.10)

207 (70.40)

63 (20.19)

26 (15.11)

59 (34.30)

78 (41.48)

Chandigarh 2002-03 2003-

04 2004-05

2005-06

2006-07

2007-08

2008-09

2009-10

2010-11

2011-12


23 32 55 121 129 78 85 176 349 681


(100) 191 (100)

312 (100)

476 (100)

518 (100)

764 (100)

862 (100)

1163 (100)

1163 (100)

1247 (100)


136 (71.20)

191 (61.21)

347 (72.89)

440 (84.94)

679 (88.87)

686 (79.58)

814 (70)

482 (41.44)

518 (41.53)


55 (28.79)

121 (38.78)

129 (27.10)

78 (15.05)

85 (11.12)

176 (20.41)

349 (30)

681 (58.55)

729 (58.46)

355

Chennai 2002-03 2003-

04 2004-05

2005-06

2006-07

2007-08

2008-09

2009-10

2010-11

2011-12


27 77 102 27 19 12 37 17 17 39


(100) 557 (100)

545 (100)

402 (100)

575 (100)

562 (100)

700 (100)

736 (100)

922 (100)

900 (100)


455 (81.68)

518 (95.04)

383 (95.27)

563 (97.91)

525 (93.41)

683 (97.57)

719 (97.69)

883 (95.77)

858 (95.33)


102 (18.31)

27 (4.95)

19 (4.72)

12 (2.08)

37 (6.58)

17 (2.42)

17 (2.30)

39 (4.22)

42 (4.67)

Delhi 2002-03 2003-

04 2004-05

2005-06

2006-07

2007-08

2008-09

2009-10

2010-11

2011-12


179 68 122 233 386 310 195 138 295 409


(100) 658 (100)

817 (100)

674 (100)

733 (100)

647 (100)

533 (100)

1188 (100)

1613 (100)

1972 (100)


536 (81.45)

584 (71.48)

288 (42.72)

423 (57.70)

452 (69.86)

395 (74.10)

893 (75.16)

1204 (74.64)

1489 (75.50)


122 (18.54)

233 (28.51)

386 (57.27)

310 (42.29)

195 (30.13)

138 (25.89)

295 (24.83)

409 (25.35)

483 (24.49)

356

Guwahati 2002-03 2003-

04 2004-05

2005-06

2006-07

2007-08

2008-09

2009-10

2010-11

2011-12


13 20 30 47 53 50 106 38 20 61


(100) 147 (100)

116 (100)

193 (100)

222 (100)

284 (100)

304 (100)

279 (100)

233 (100)

240 (100)


117 (79.59)

69 (59.48)

140 (72.53)

172 (77.47)

178 (62.67)

266 (87.5)

259 (92.83)

172 (73.81)

171 (71.25)


30 (20.40)

47 (40.51)

53 (27.46)

50 (22.52)

106 (37.32)

38 (12.5)

20 (7.16)

61 (26.18)

69 (28.75)

Hyderabad 2002-03 2003-

04 2004-05

2005-06

2006-07

2007-08

2008-09

2009-10

2010-11

2011-12


19 51 67 18 21 35 27 15 37 192


(100) 396 (100)

431 (100)

442 (100)

379 (100)

536 (100)

493 (100)

438 (100)

898 (100)

837 (100)


329 (83.08)

413 (95.82)

421 (95.24)

344 (90.76)

509 (94.96)

478 (96.95)

401 (91.55)

706 (78.61)

759 (90.68)


67 (16.91)

18 (4.17)

21 (4.75)

35 (9.23)

27 (5.03)

15 (3.04)

37 (8.44)

192 (21.38)

78 (9.31)

357

Kochi 2002-03 2003-

04 2004-05

2005-06

2006-07

2007-08

2008-09

2009-10

2010-11

2011-12


18 38 131 20 14 36 42 43 61 184


(100) 298 (100)

380 (100)

230 (100)

232 (100)

321 (100)

377 (100)

512 (100)

578 (100)

700 (100)


167 (56.04)

360 (94.73)

216 (93.91)

196 (84.48)

279 (86.91)

334 (88.59)

451 (88.08)

394 (68.16)

418 (59.71)


131 (43.95)

20 (5.26)

14 (6.08)

36 (15.51)

42 (13.08)

43 (11.40)

61 (11.91)

184 (31.83)

282 (40.28)

Kolkata 2002-03 2003-

04 2004-05

2005-06

2006-07

2007-08

2008-09

2009-10

2010-11

2011-12


95 293 441 282 214 220 116 130 215 229


(100) 1012 (100)

1219 (100)

1176 (100)

1049 (100)

988 (100)

940 (100)

813 (100)

1030 (100)

995 (100)


571 (56.42)

937 (76.86)

962 (81.80)

829 (79.02)

872 (88.25)

810 (86.17)

598 (73.55)

801 (77.76)

793 (79.69)


441 (43.57)

282 (23.13)

214 (18.19)

220 (20.97)

116 (11.74)

130 (13.82)

215 (26.44)

229 (22.23)

202 (20.30)

358

Lucknow 2002-03 2003-

04 2004-05

2005-06

2006-07

2007-08

2008-09

2009-10

2010-11

2011-12


18 55 53 10 4 1 0 0 0 37


(100) 313 (100)

418 (100)

285 (100)

296 (100)

270 (100)

265 (100)

225 (100)

352 (100)

460 (100)


260 (83.06)

408 (97.60)

281 (98.59)

295 (99.66)

270 (100)

265 (100)

225 (100)

315 (89.48)

458 (99.56)


53 (16.93)

10 (2.39)

4 (1.40)

1 (0.33)

0 (0)

0 (0)

0 (0)

37 (10.51)

2 (0.43)

Mumbai 2002-03 2003-

04 2004-05

2005-06

2006-07

2007-08

2008-09

2009-10

2010-11

2011-12


108 270 575 368 196 333 143 167 278 786


(100) 1033 (100)

1193 (100)

713 (100)

1176 (100)

1319 (100)

1309 (100)

1390 (100)

2425 (100)

3421 (100)


458 (44.33)

825 (69.15)

517 (72.51)

843 (71.68)

1176 (89.15)

1142 (87.24)

1112 (80)

1639 (67.58)

1864 (54.48)


575 (55.66)

368 (30.84)

196 (27.48)

333 (28.31)

143 (10.84)

167 (12.75)

278 (20)

786 (32.41)

1557 (45.51)

359

Table 7.11 states the details of the complaints received, solved and pending for

the study period. The ombudsman wise analysis of the performance in terms of

complaints handling depicts that Ahmedabad has been most efficient in 2009-10 when

its rate of solving the complaints has been marked maximum i.e. 94.88% in

comparison to the rest of the years. Similarly Bhopal has been solving the maximum

number of complaints in 2005-06 marking the rate of 97.89%, Bhubaneswar has been

solving the maximum number of complaints in 2009-10 marking the rate of 84.88%

and Chandigarh has been solving the maximum number of complaints in 2007-08

marking the rate of 88.87%. Chennai has been most efficient in 2006-07 when the rate

of solving the complaints has been marked maximum i.e. 97.91% in comparison to

the rest of the years. Similarly Delhi has been solving the maximum number of

complaints in 2002-03 marking the rate of 85.65%, Guwahati has been solving the

maximum number of complaints in 2009-10 marking the rate of 92.83%, and

Hyderabad has solved the maximum number of complaints in 2008-09 by stating the

rate of 96.95%. Similarly Kochi, Kolkata, Lucknow and Mumbai has been most

efficient in solving the complaints in hand by depicting the rate of 94.73% in 2004-

05, 88.25% in 2007-08, 100% in the year 2007-08, 2008-09 and 2009-10 and 89.15%

in 2007-08 respectively. The year wise analysis states that Lucknow has efficiently

resolved maximum number of complaints in most of the years. In the year 2002-03

Delhi depicts the rate of 85.65% and has been the most efficient. It is the year 2003-

04 Hyderabad has depicted the rate of 83.08% efficiency. Similarly in 2004-05

Lucknow has depicted the 97.60% efficiency and in the rest of the years Lucknow has

been the most efficient by showing the rate of 98.59%, 99.66%, 100%, 100% , 100%

and 99.56% in 2005-06, 2006-07, 2007-08, 2008-09, 2009-10 and 2011-12. In the

year 2010-11 Chennai has solved maximum number of complaints in hand i.e.

95.77%. The table above depicts that the total number of complaints have increased

over the years. Steady increase in number of complaints received by various

Ombudsman shows that the policy-holders are reposing their confidence in the

institution of Insurance Ombudsman (Source: IRDA).

360

POLICY-IMPLICATIONS

The findings of the objective have important policy- implications for both the

policy-makers and the policyholders of the insurance companies. The insurance

companies need to update their consumer complaint handling system, in terms of the

actions, such as developing a positive attitude towards the grievance by realizing the

importance that the grievance is the effective mechanism of building reputation and it

also helps in creating new customers in the market. These companies should lay stress on

imparting of adequate training to redress officers in handling of consumers’ grievances,

which will lead to reduction in number of grievances. They should understand that

Grievance Handling needs a human touch. The insurers must acknowledge the complaint

as an opportunity and encash the situation in the right direction. Due to complications of

a financial product, like insurance, the demand for an effectual CGR mechanism

increases, where the insurance company gets a chance to re-build their image by

satisfying the customers. It needs no emphasis that if the consumer complaints are not

adequately handled and not redressed efficiently, a consumer will certainly approach the

external agency, including a regulatory body, namely, Ombudsman or Consumer Forum,

for redress of his grievance. The regulator must also ensure a strict enforcement of the

code of conduct for complaint-handling. The present research objective and its findings

may be of considerable use to insurance institutions, policy makers and to academic

researchers in the area of consumer protection and their well-being.

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comparative analysis of performance of public and...

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