The total number of complaints registered under UFBP (Unfair Business Practices) has increased from 23,335 in 2023-24 to 26,667 in 2024-25.
The total number of complaints registered against life insurers has remained almost the same at 1,20,429 in 2024-25, against 1,20,726 in 2023-24, while the total number of complaints registered under UFBP (Unfair Business Practices) has increased from 23,335 in 2023-24 to 26,667 in 2024-25, the report said.
Thus, the share of UFBP grievances to total grievances has increased to 22.14 percent in FY25 from 19.33 percent in the previous fiscal.
Misselling involves the sale of insurance products to consumers without proper disclosure of their terms or suitability.
“To prevent or reduce mis-selling, insurers have been advised to implement strategies such as assessing suitability of products, implementing distribution channel-specific controls and developing a plan to address mis-selling complaints, including conducting root cause analysis periodically,” IRDAI said in its annual report 2024-25.
The Ministry of Finance has repeatedly warned banks and insurance companies against mis-selling insurance policies to customers, stressing the importance of maintaining best corporate governance practices.
Misselling often leads to higher premiums for customers, and as a result, policyholders do not renew their policies, resulting in an increase in lapses.
As for insurance penetration, the report says it remained static at 3.7 percent in FY25. This is well below the world average of 7.3 percent.
Insurance penetration in the life insurance sector fell from 2.8 percent in the previous year to 2.7 percent in 2024-2025. Penetration related to general insurance sector remained flat at 1 percent during 2024-25 compared to 2023-24, the report said.
In 2024-25, insurance density in India showed a modest increase, from $95 in 2023-24 to $97 in 2024-25. Specifically, life insurance density increased from $70 to $72, while non-life insurance density remained stable at $25.
This upward trend in insurance density has been consistent since 2016-17, the report said.
Insurance penetration and density are two metrics often used to assess the level of development of a country’s insurance sector.
While insurance penetration is measured as the percentage of insurance premiums to GDP, insurance density is calculated as the ratio of premiums to population (premium per capita).
Published on January 4, 2026
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