Mumbai: Health insurers have still some way to go in winning customer trust. Satisfaction of policyholders at the time of claims remains moderate at 82.8 on a 100-point scale, but a sharp rise in unexplained claim rejections and continued reliance on reimbursement routes are eroding consumer trust, according to Policybazaar’s “Is India Happy with Health Insurance Claims? 2.0” report.The report said the main grievance of policyholders is that claims are being rejected for reasons unknown to them, while consumers want insurers to complete thorough underwriting at the onboarding stage where they go through all checks for getting health insurance after which they do not have to worry. However, insurers are going back to the proposal form and conducting investigations at the time of claims. The report added that this gap in communication and onboarding remains central to customer dissatisfaction.According to the study, dissatisfaction linked to claim rejections due to non-disclosure of pre-existing diseases declined to 15% in 2024-25 from 33% in 2023. However, this improvement has been offset by a lack of clarity, with 73% of dissatisfied claimants saying they were not given a clear or specific reason for rejection, up from 53% in 2023. The report said that denial without explanation breaks consumer trust and is difficult to rebuild.The findings said insurers often adopt an investigative approach at the claims stage, conducting retrospective checks on proposals and penalising customers for gaps left during onboarding. It said conditions missed at the time of purchase later become grounds for rejection or push patients out of the cashless system. As a result, 39% of consumers now want insurers to carry out comprehensive medical verification at the time of purchase so that claims can be honoured during emergencies.The report highlighted a 13-point gap between cashless claims, which scored 86.7 on the HCX index, and reimbursement claims, which scored 73.7. It said reimbursement is typically not a preferred choice, with around 60% of claimants opting for it due to concerns over administrative delays during hospital discharge.According to the study, 76% of reimbursement claimants had to borrow funds or liquidate long-term investments to pay hospital bills upfront, compared with 68% in 2023. It added that delays in processing, cited by 58% of respondents, and lack of timely updates, cited by 54%, were the main pain points for dissatisfied consumers.The report said restoring trust would require insurers to eliminate vague denial terms such as “not admissible” and provide clause-specific explanations along with clear appeal options. It added that insurers should shift medical underwriting entirely to the onboarding stage, simplify claim forms, and enable hospital-led document submissions to reduce the burden on patients.
