Every few years, a new insurance company enters the Indian market with attractive advertisement, repackaged innovative products and competitive premiums. As a consumer, this raises an important question,

Should you purchase an insurance policy from a newly launched insurance company? The answer is not a simple “YES” or “NO.” Instead, it depends on how you evaluate the insurer.

Why are New Insurance Companies Offer Cheaper Premiums?
When a new insurance company enters the market, its primary objective is to attract customers and build market share. To achieve this, insurer may offer

·       Competitive premiums

·       Attractive product features

·       Aggressive marketing campaigns

·       Digital first customer experience

These benefits can certainly make a new insurer appear attractive. However, insurance is a long-term contract, and the decision should not be based solely on premium.

What Should You Evaluate Before Buying?
When selecting an insurance company, consider factors beyond premium amount. Factors such as

Track Record
An established insurer has years of operational history that can help consumers assess consistency and reliability. A longer track record allows customers to evaluate how the insurer has performed across different market cycles.
 

Claim Servicing Experience
The true value of insurance is tested during claim settlement. Review the insurer’s claim servicing process, customer experience and overall reputation from handling claims. A quick reddit or LinkedIn search related to an insurance company can help you make a sound decision. 

Grievance Redressal Mechanism
A well established grievance department can help policyholders resolve service-related concerns efficiently. Before purchasing a policy, understand how the insurer handles complaints and escalations raised. IRDAI Public disclosures share good oversight over such issues.

Solvency Position
Solvency reflects an insurer’s financial strength and ability to meet future obligations. A financially strong insurer is generally better positioned to honor long-term commitments.

Regulatory Compliance
Insurance companies operate under the supervision of IRDAI and are required to comply with regulatory guidelines. Consumers should ensure they deal only with licensed and regulated insurers.

New Company vs Established Company

A newly launched insurance company may offer attractive products and pricing. However, it may still be in the process of building

·       Long-term claim settlement reputation

·       Customer service infrastructure

·       Market credibility

·       Operational consistency

On the other hand, established insurers have had years to develop these systems and processes. This does not automatically make every insurer unsuitable or every old insurer superior. It simply means consumers should conduct additional due diligence before making a decision, or work with a qualified insurance professional who can offer his or her expertise on this subject.

The Right Question to Ask

Instead of asking “IS THIS INSURANCE COMPANY NEW.?” 

Ask,

“Does this insurance company have the infrastructure, financial strength, servicing capability and a reliable reputation to support me when I need a claim.?” That question is far more important than the premium difference.

Final Thought

Insurance is a promise that may need to be honored years or even decades in the future. Therefore, when choosing an insurance company, do not evaluate only the premium. Evaluate the insurer’s track record, claim servicing capability, grievance handling process, financial strength and long-term commitment to policy holders, because in insurance, the cheapest policy is not always the most important factor.

 The ability of the insurer to support you when it matters most is what truly counts.

INSURANCE AWARENESS > INSURANCE IGNORANCE
Helping individuals and families make informed insurance decisions through education, transparency, and awareness

Last Updated - 28/01/2026
Author Name - Abhishek Borkar

Disclaimer
This article is intended solely for educational and awareness purposes and should not be considered financial, legal, tax, investment, or insurance advice.

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Cover images and illustrations may be generated using Artificial Intelligence (AI) tools for educational and illustrative purposes.