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
