Indian life insurance sector as of 31 March 2024 held unclaimed amounts totalling INR200.62bn ($2.35bn) according to the Insurance Regulatory and Development Authority of India (IRDAI). According to IRDAI annual report for 2023-24 unclaimed amounts of life insurers at the beginning of the financial year 2023-24 was INR222.37bn.
The unclaimed amounts in the life insurance sector are higher from policies sold by agents as against other channels like bancassurance or a digital platform according to an industry analysis done in 2024 by the life insurers.
According to an analysis by GlobalData for the five financial years from 2018-19 to 2022-23, the state-owned life insurer Life Insurance Corporation of India (LIC) accounted for more than 90% of the total unclaimed funds in the last five years. LIC continues to be the market leader by market share in Indian life insurance business with overall market share of 64.02%.
The IRDAI annual report said that to reduce the unclaimed amounts and expedite refunds to consumers and also to contain further accumulation of unclaimed amounts with the insurers, the IRDAI in collaboration with the insurers launched a special drive for a period of six months from June 2023 to November 2023. The Authority also monitored the progress of clearance of unclaimed amounts lying with the life insurers on a monthly basis,” the regulator said in its annual report. A net reduction of INR10bn was achieved in respect of life insurers during this special drive period.
The IRDAI for the benefit of insurance consumers also issued a modification to ‘Master circular on Unclaimed Amounts on 16 February 2024 for proper identification and efficient disbursement of the unclaimed amounts, modifying few definitions including that of ‘unclaimed amount’ and suggested measures for adoption by insurers towards reduction of existing unclaimed amounts and to contain further accumulation of the unclaimed amounts.