In this article we have to see the claim settlement ratio of life insurance companies in India. Before that, we have to see what is insurance & its types and also the claim & claim settlement of the insurance companies. Hence, we know why claim settlement ratio of life insurance companies is important before taking the insurance.

Insurance is a financial instrument that is used to provide a financial security to the things what one insures. It pays out a sum of money either on the loss or damage of the things to replace it or manage behalf of it in a certain period of time.

Insurance is offered by an insurance company that they collect a certain amount of money from the people and provide an assurance for the coverage of the insured thing with some terms and conditions. Hence, insurance policy is a contract made between the insurance company and the policy holder to provide claims to the insured in terms of loss of the insured thing in exchange of a premium.

Types of Insurance

Insurance is categorized in to two different ways. One is life insurance and other one in Non-life insurance.

Life Insurance

Life insurance is a contract between the life insurance company and the life insured, where the insurer promises to pay a sum of money or how much the life insured took a coverage himself to the designated beneficiary, upon the death of insured person.

In life insurance the policy is categorized in many types, Term plan (Only risk coverage of life), Traditional Plan (Life coverage including maturity benefit), ULIP (Life coverage including market linked befit maturity). Depending upon the policy type and people’s eligibility the risk coverage varies.

Non-life Insurance

Non-life insurance or General Insurance is used to provide coverage to all things except human life like motors, machines, buildings, human health…etc. In this insurance no maturity benefit, only provide the replacement.

Claim Settlement of Insurance Companies

In both life and non-life insurance the common thing that an insured person get from the insurance company is money that what one insured incase of a damage or loss. The process to get a risk coverage money from the insurance company is called claim.

Claim is a process of request to an insurance company for asking a payment due to loss or damage of thing which we insured based on the terms and conditions of the insurance policy. After that, the insurance company collect all the required documents and review the claims for its validity and then pays out to the insured or to the nominee.

The process of pays out a risk coverage amount to the insured on the occurrence of the event specified in the contract, in a return of premium paid for the insured is called claim settlement of insurance company.

About Life Insurance Companies

In India there are 24 life insurance companies are there. In 24 insurance companies, only Life Insurance Corporation of India (LIC) is owned by Indian Government and other 23 companies are owned by private organizations. In 1999, at the time of privatization of organizations, Indian Government formed a statutory body under an act of parliament (Insurance Regulatory and Development Authority Act, 1999) to regulating and promoting the insurance and reinsurance industries in India. Each and every financial year IRDAI monitor the operations of insurance companies about their growth, customer satisfaction, complaints and other activities. Finally, insurance regulatory provide an annual report that contains the all details of the life insurance companies and it helps people to choose the right insurance company to insure them. In that report there are some indicators helps to choose the right insurance company, that are Asset Under Managed by the insurance company, Claim Settlement Ratio, Solvency Ratio, Persistency Ratio, Combined ratio…etc.

CLAIM SETTLEMENT RATIO

Claim settlement ratio is defined as number of claims settled to the insured against the number of claims filed to the insurer.

Claim Settlement Ratio = (Total no of claim paid during a financial year) / (Total no of claims received in a financial year)

It is an important factor while choosing the life insurance company to insure. Higher the claim settlement ratio indicates the better insurer to insure.

Example:

In a financial year a life insurance company received 100 claims. In that the company paid 97 claims, 1 claim pending and 2 claims are rejected means the claim settlement ratio of that life insurance company is 97%.

CLAIM SETTLEMENT RATIO OF LIFE INSURANCE COMPANY

In this article claim settlement ratio of life insurance company is tabulated for last 5 years.

Life Insurer
FY 2016-17
FY 2017-18
FY 2018-19
FY 2019-20
ADITYA BIRLA SUNLIFE
94.69% 96.38% 97.15% 97.54%
AEGON LIFE
97.11% 95.67% 96.45% 98.01%
AVIVA LIFE
90.60% 94.45% 96.06% 97.53%
BAJAJ ALLIANZ LIFE
91.67% 92.04% 95.01% 98.02%
BHARTI AXA LIFE
92.37% 96.85% 97.28% 97.40%
CANARA HSBC OBC LIFE
94.95% 95.22% 94.04% 98.12%
DHFL PRAMERICA LIFE
90.87% 96.62% 96.80% yet to update
EDELWEISS TOKIO LIFE
93.29% 95.24% 95.82% 83.44%
EXIDE LIFE
96.40% 96.81% 97.03% 98.15%
FUTURE GENERALI LIFE
89.53% 93.11% 95.16% 95.28%
HDFC LIFE
97.62% 97.80% 99.04% 99.07%
ICICI PRUDENTIAL LIFE
96.68% 97.88% 98.58% 97.80%
IDBI FEDERAL LIFE
90.33% 91.99% 95.79% 96.47%
INDIAFIRST LIFE
82.65% 89.83% 92.82% 96.65%
KOTAK MAHINDRA LIFE
91.24% 93.72% 97.40% yet to update
LIFE INSURANCE CORPORATION
98.31% 98.04% 97.79% yet to update
MAX LIFE
97.81% 98.26% 98.74% 99.22%
PNB METLIFE
87.14% 91.12% 96.21% 98%
RELIANCE LIFE
94.53% 95.17% 97.71% 98.10%
SAHARA INDIA LIFE
90.21% 82.74% 90.16% yet to update
SBI LIFE
96.69% 96.76% 95.03% 97.04%
SHRIRAM LIFE
63.53% 80.23% 85.30% yet to update
STAR UNION DAI-ICHI LIFE
84.05% 92.26% 96.74% yet to update
TATA AIA LIFE
96.01% 98.00% 99.07% 99.06%

Source: IRDAI

To know about various life insurance companies by using the link given here INSURANCE COMPANIES

Leave a Reply