IRDAI recently published the annual report for FY 2018-19 that covers the Claim Settlement Ratio (CSR) of life insurance companies in India for 2018-19. The latest IRDAI report that was published on 16th December 2019, will help you to pick the right life insurance company in the year 2020.
Know About Claim Settlement Ratio
Claim Settlement Ratio is the percentage of the number of claims paid to the total claims received by an insurance company. It is the ratio of death claims settled against the claims received during a financial year.
|Claim Settlement Ratio = Total claims settled / Total claims received*
Where Total Claims received * = (Claims reported in the financial year + claims pending at the start of the year)
For example, a life insurance company received 100 claims and settled 96 claims, then the claim settlement ratio is 96%. The remaining 4% rejected by the life insurance company. Based on the latest CSR data, you can assume the approach of insurance companies while with death claims.
Claim Settlement Ratio of Life Insurance Companies
Given below is the latest Claim Settlement Ratio of all life insurance companies for FY 2018-19, as released by IRDAI.
- There are twenty life insurers having claim settlement ratio equal to or higher than 95%. It includes Tata AIA (07%), HDFC Life (99.04%), Max Life (99.22%), ICICI Prudential (98.58%), LIC (97.79%), Reliance Nippon Life (97.71%), Kotak Mahindra Life (97.40%), Bharti AXA Life (97.28%), Aditya Birla Sun Life (97.15%), Exide Life (97.03%), Pramerica Life (96.80%), Star Union (96.74%), Aegon Life (98.01%), PNB Met Life (96.21%), Aviva Life (96.06%), Edelweiss Tokio (95.82%), IDBI Federal (95.79%), Future Generali Life (95.16%), SBI Life (95.03%), Bajaj Allianz Life (95.01%).
- There are three life insurers having claim settlement ratio in the range of 90-95%. It includes Canara HSBC OBC (94.04%), India First (92.82%) and Sahara Life (90.16%).
- Shriram life is the only life insurer having a claim settlement ratio of less than 90%. It has a CSR of 85.30%.
- For private insurance companies, the settlement ratio has gone up by 1.40% and stands at 96.64% during the FY 2018-19 compared to 95.24% in the previous year. For stand-alone government-run life insurance company, LIC has a settlement ratio of 97.79% (decrease of 0.25%) in FY 2018-19 compared to 98.04% in the previous year.
To know previous year’s CSR, click on- claim settlement ratio of FY 2017-18
CSR Trend of Life Insurance Companies
Let’s have a thorough insight into the trend of claim settlement ratio of life insurance companies in FY 2018-19 from the previous year.
When it comes to choosing the best life insurance company, you also need to ascertain the amount of claim settled by the company during the financial year 2018-19. A life insurance company having a high amount of average claim settled signifies a green signal for settling the claims promptly.
Know Life Insurance Companies last 5 years claim settlement Ratio
Tata AIA has the highest claim settlement ratio of 99.07%, however, the average claim settled amount is of around Rs 5.8 lacs sum assured. Hence, it is quite obvious that its majority of claim settlement goes in the category of Endowment Plans but not in Term Insurance.
It’s thus extremely essential to check the claim settlement amount along with the claim settlement ratio that will help you to give a fair idea about the inclination of the insurance company towards the settlement of the claims.