19 FINANCEOUTLOOKINDIASEPTEMBER, 2025the grievance process. So to take an example, the development of Optical Character Recognition (OCR) technology can read policy documents, summarize benefits, and eliminate confusing insurance jargon, hence making it really easy for policyholders to understand their entitlements and potential reasons for claim rejections. Furthermore, AI can assist in building grievance applications which can be carried out by referencing successful past cases and highlighting relevant regulations based on the specific type of complaint. Hence, it is important for insurance players to bridge these gaps by leveraging such advanced technologies to make the grievance journey more straightforward for policyholders.The Role of Regulatory BodiesIt is important to note that regulatory bodies such as the Insurance Regulatory and Development Authority of India (IRDAI) play an imperative role in steering innovative grievance redressal mechanisms. For instance, platforms like BIMA Bharosa and the Insurance Ombudsman provide formal grievance channels for policyholders. However, one of the pressing challenges is how complaints are presented. Oftentimes, policyholders tend to focus on emotional aspects rather than clearly outlining the critical facts. Furthermore, the Ombudsman process can feel intimidating for policyholders, as they must present their cases against insurance experts; hence giving rise to an imbalanced environment.Adding to this, IRDAI can also enhance these platforms by integrating more technology-driven tools to streamline the overall process. With this, it would help policyholders present their cases more effectively; thereby ensuring their grievances are heard and resolved in a more equitable manner.The Potential of Alternative Dispute ResolutionWhen it comes to expediting grievance resolution, alternative dispute resolution methods like mediation or online arbitration could also be integrated into the Indian insurance sector. While online complaint filing is technically available, there are many ombudsman offices that still require physical copies which undermine the convenience of digital submissions. Hence, this outdated practice forces policyholders to travel to Ombudsman offices which causes unnecessary inconvenience. Furthermore, in some cases, it also discourages them from pursuing their complaints. With this, transitioning to a fully digital system, including online mediation, would greatly enhance accessibility and efficiency while resolving disputes.Balancing Innovation and TransparencyInsurers must strike a balance between innovation in grievance redressal systems and maintaining transparency & trust with policyholders. This can be carried out by ensuring that all decisions adhere to policyholder-friendly guidelines set by the IRDAI which results in insurers being able to foster greater trust. This demonstrates that insurers can adopt a more customer-centric approach that thoroughly evaluates genuine complaints, thereby supporting policyholders and enhancing trust in the insurance process.So to wrap it up, driving the much needed innovation through AI, blockchain, and digital tools, while also integrating alternative dispute resolution mechanisms can significantly improve the grievance redressal process in the Indian insurance sector. Given the situation, regulatory bodies like the IRDAI, alongside insurers, will have a vital role to play in ensuring these innovations are implemented and are being maintained with transparency and fairness for all policyholders.Insurers must strike a balance between innovation in grievance redressal systems and maintaining transparency & trust with policyholders
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