Irdai asks insurers to tie senior exec performance to customer service

The (Irdai) has asked insurers to align the and compensation of senior executives more closely with customer outcomes, transparency and governance standards under a revised framework issued through a circular dated May 25.

The regulator said insurers will now have to move beyond a narrow focus on financial and operational metrics while assessing key management personnel and instead link performance parameters to measurable customer outcomes.

As part of the revised framework, insurers have also been directed to disclose standardised performance data covering areas such as financial soundness, product performance, claims handling, and quality.

The move is aimed at improving transparency, strengthening customer trust and reinforcing accountability across the insurance sector.

“Irdai is moving towards removing information asymmetry in the sector and empowering policyholders to make informed decisions,” the regulator said.

Explaining the rationale behind the changes, Irdai chairman Ajay Seth said evolving customer expectations and the needs of the economy require insurers to place greater emphasis on measurable customer outcomes, responsiveness, transparency in decision-making and sustainable value creation.

(With inputs from TOI)