In the below table solvency ratio of Indian life insurance companies is given from the financial year of 2018-19.

Life Insurer
30.06.2018 30.09.2018 31.12.2018 31.03.2019
ADITYA BIRLA SUNLIFE 2.12 2.04 2.04 1.98
AEGON LIFE  1.95 2.15 1.99 2.59
AVIVA LIFE 2.92 2.89 2.95 2.99
BAJAJ ALLIANZ LIFE 7.74 7.49 7.67 8.04
BHARTI AXA LIFE 1.62 1.62 1.7 1.71
CANARA HSBC OBC LIFE 3.7 3.72 3.73 3.93
DHFL PRAMERICA LIFE 5.33 4.91 4.8 4.6
EDELWEISS TOKIO LIFE 2.22 2.45 2.37 2.29
EXIDE LIFE 1.93 1.8 1.86 2.08
FUTURE GENERALI LIFE 1.94 1.64 1.56 1.62
HDFC LIFE 1.97 1.93 1.91 1.88
ICICI PRUDENTIAL LIFE 2.35 2.34 2.24 2.15
IDBI FEDERAL LIFE 3.83 3.82 3.85 3.34
INDIAFIRST LIFE 1.97 1.73 1.68 1.74
KOTAK MAHINDRA LIFE 3.11 3.1 3.1 3.02
MAX LIFE 2.62 2.61 2.39 2.42
PNB METLIFE 2.02 2.01 2 1.97
RELIANCE LIFE 2.67 2.81 2.79 2.6
SAHARA INDIA LIFE 9.24 9.42 9.47 8.44
SBI LIFE 2.14 2.21 2.23 2.13
SHRIRAM LIFE 2.01 2.05 2.14 1.82
STAR UNION DAI-ICHI LIFE 2.78 2.74 2.9 2.53
TATA AIA LIFE 2.91 2.68 2.59 2.68

Solvency ratio of life insurance companies in India are shown in this article and also explained how it is calculated, how it is used to find the good insurance company to insure, why it is important to choose an life insurance company.

Life Insurance

Life Insurance is a financial instrument offered by the insurance companies that provide a life coverage of life insured against any risks. Also, it is a contract made by the insurance companies about to assure risk coverage of the human life by exchanging of paid premium.

Life Insurance Companies in India

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. LIC is formed in the year of 1956 and in that period, there is no regulations for selling and regulating the insurance company.

Formation of IRDAI

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. Hence, IRDAI (Insurance Regulatory and Development Authority of India) was formed in the year of 1999.

Purpose of IRDAI

The purpose of the formation of IRDAI is to protect the insurable interest of the policy holders and to regulate, promote, monitor and also ensure the growth of the life insurance companies. After the formation of IRDAI, private insurance companies got licensed as per the rules and regulation defined by it and entered in to the Indian market with the help of foreign insurance companies.

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. Other than that, the new business growth, year on year growth, profitability, stability and also bonus declared. In this article one of the important indicators, Solvency Ratio is explained and make you to know how it is important and how it is calculated.


Solvency ratio is defined as a measure of risk that an insurer faces of claims what they got. It is an indicator for the financial capacity of a company to meet their short- and long-term liabilities. It helps to identify whether the insurance company has enough financial capability to settle all claims in extreme situations like storm, Tornado, flood, earthquake, fire and any other natural disaster.

As per the IRDAI norms, In India all insurance companies are required to maintain 150% of solvency ratio to minimize bankruptcy risk. So, solvency ratio is important one before taking an insurance in any insurance company. It also defined whether the financial situation of an insurance is good or bad.


Solvency Ratio is determined by assessing a insurance company’s solvency margin (a calculation of how company’s assets compared to its liabilities. In other terms, the solvency ratio is derived by dividing company’s operating income (after tax) by the company’s debt liabilities.

Solvency Ratio = (Net Income + Depreciation) / Liabilities

In simple terms,

Solvency Ratio = Net Assets / Net Premium Written

Hence, Solvency ratio helps you to determine the important of settling of your insurance claims. A life insurance company with a high solvency ratio is more likely to be financially stable, more equipped to pay out insurance claims and able to survive for long time.

As per the guidelines by the IRDAI, only Life Insurance corporation of India has to maintain the solvency ratio nearly 150%. Since, it was formed in the year of 1956, LIC having a huge customer base, AUM and experience to maintain that. In the upcoming years other private insurance companies might achieve it.

Source: IRDAI                                                                                                                                                           You can also read about life insurance companies in India in our website in this link here Insurance Companies in India


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