Mumbai: The IRDAI is internally discussing a sharper and more granular framework for performance-linked key performance indicators (KPIs) for chief executives and senior management personnel at insurance companies, as the regulator steps up oversight on claims settlement timelines, customer complaints and expense management.The regulator has sought industry feedback on proposals to tighten accountability standards for senior management, including sharper monitoring of claims servicing, expense management and customer grievance-related metrics as part of MD and CEOs performance evaluations, said multiple industry executives. “Earlier the framework said KPIs around claims, customer servicing and expenses should be part of management evaluation. Now discussions are around introducing more specific measurable parameters,” said a person familiar with the matter.The proposed metrics under discussion could include targets linked to claims settlement turnaround time, reduction in expense of management (EOM) ratios, complaint resolution benchmarks and loss ratios.The discussions come at a time when the regulator has increased scrutiny of distribution costs and customer service standards, particularly in segments such as health insurance where claim-related complaints and hospital disputes have risen.Industry executives said the regulator has increasingly been suggesting that governance should move beyond financial growth metrics to include policyholder outcomes and operational efficiency.The insurance regulator had earlier tightened norms around expense of management and oversight through revised governance regulations. Insurers are already required to align remuneration structures with long-term policyholder interests.“The corporate governance guidelines already have multiple control mechanisms in terms of compensation and outcomes of customer experience. Regulations have moved away from rule-based strict micromanagement to more principle-based frameworks, and we hope it does not go back to that kind of a regime,” a chief executive officer of a large general insurance company said.
IRDAI may tighten CEO KPIs on claims, expenses and customer service
The IRDAI is developing a more detailed framework for performance-linked key performance indicators (KPIs) for insurance company executives. This initiative aims to enhance oversight on claims settlement, customer complaints, and expense management, pushing for sharper accountability standards and measurable parameters in senior management evaluations.
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