Insurance companies must adopt clear, concise, and straightforward language in their policy documents to bridge the trust gap with customers and reduce the rising number of complaints, emphasized Pushpa Girimaji, a prominent consumer affairs expert and a member of the Insurance Regulatory and Development Authority of India (IRDAI)’s Insurance Ombudsman Advisory Committee.
Speaking at an industry roundtable on “Improving Transparency in Insurance Communications” held in New Delhi today, Girimaji called upon insurers to move away from complex legal jargon and prioritize customer understanding while drafting policy terms and conditions. She highlighted that a significant portion of policyholder grievances stem from misunderstandings arising due to ambiguous and complicated policy wordings.
“A large number of complaints reaching the Insurance Ombudsman are not about fraudulent practices, but about miscommunication and misunderstanding of what is covered and what is excluded,” said Girimaji. “Policyholders often feel deceived when claims are denied, simply because they did not fully understand the fine print. Simplifying language is the first step towards reducing such friction.”
Growing Concern Over Rising Customer Complaints
India’s insurance sector has witnessed robust growth in recent years, with both life and general insurance segments expanding their reach among the population. However, this growth has also seen a corresponding rise in customer grievances. According to IRDAI’s annual report, over 2.5 lakh complaints were registered in 2024-25 through various channels, with issues related to policy wording and claim denials forming a considerable chunk.
Girimaji pointed out that while the Insurance Ombudsman mechanism has been instrumental in offering policyholders a cost-free, impartial grievance redressal platform, the root cause of many disputes remains preventable.
“It is ironic that we have policies meant to provide peace of mind, yet their complexity often results in confusion, anxiety, and frustration for consumers. Insurers must see this as an urgent call for reform,” she added.
IRDAI’s Push for Customer-Centric Communication
The IRDAI has been consistently advocating for improved customer-centric practices among insurers. The regulator’s recent guidelines on “Product Filing Procedures” mandate insurers to ensure that the policy documents are ‘simple, precise, and easy to understand’. However, Girimaji noted that mere regulatory directives are not sufficient unless companies embrace transparency as a core business philosophy.
“Simplifying documents should not be treated as a compliance checkbox. It needs to be part of an insurer’s commitment to customer welfare,” she said. “Training agents, improving disclosure norms, and adopting visual aids like infographics for explaining key policy features are some of the measures insurers can adopt to make policies more accessible.”
Industry Leaders Acknowledge the Challenge
Senior representatives from leading insurance companies, consumer rights groups, and regulatory bodies attended the roundtable discussion. Many industry leaders echoed Girimaji’s sentiments, acknowledging that technical language and legal complexities in policy documents often act as barriers to customer trust.
Rajesh Kapoor, CEO of Bharati Insurance Co., admitted, “As an industry, we are guilty of using dense legal language in our policy wordings. While this might protect the insurer from legal ambiguities, it alienates the customer. We are now working on a ‘Plain Language Initiative’ where every policy document will be accompanied by a one-page summary in layman’s terms.”
Similarly, Meera Sinha, Head of Customer Experience at SafeLife Insurance, shared that her company has already started conducting focus groups with policyholders to test the readability of their insurance documents. “We realized that simplifying our communication is not just a regulatory obligation, but a competitive advantage. Customers value clarity,”.
A Call to Action for Insurers
Girimaji also proposed a collaborative approach where the IRDAI, insurers, and consumer organizations work together to develop standard best practices for drafting policy documents.
“We need sector-wide benchmarks on language clarity. Perhaps, a certification system that labels policies as ‘Consumer-Friendly’ could motivate companies to focus on this aspect,” she suggested.
She further recommended that insurers adopt technology-based solutions such as interactive policy explainers, mobile-friendly summaries, and AI-driven customer support to assist customers in understanding their coverage.
The Road Ahead
With India’s insurance penetration still below the global average, building consumer trust remains crucial for the industry’s sustained growth. Simplifying policy documentation is a foundational step towards this goal.
Girimaji concluded her address by emphasizing that transparency, clarity, and honesty are non-negotiable if the insurance industry seeks to transform from a transaction-driven business to a trust-driven service.
“The moment of truth for any insurer is the claim settlement process. A customer’s experience there will determine their faith in the brand and the sector at large. It’s high time we ensure that no customer is blindsided by the fine print,” she asserted.
The roundtable ended with a consensus among all stakeholders to prioritize customer-first communication strategies and foster a transparent ecosystem that benefits both the industry and its customers.
