IRDAI Claims Settlement Ratio 2015-16

July 21, 2021

Claim Settlement Ratio is the number of insurance claims settled by a life insurance company as a percentage of numbers of claims received over a particular period of time. It is measured for all the products of the life insurance company in a given financial year. IRDAI issues the claim settlement ratio of all the life insurance companies in its annual report, which can be easily found on the internet. in this article we will know about Claims Settlement Ratio 2015-16 of Life insurance companies.

Why it is Important to Check CSR of a Life Insurance Company?

Settlement of Claim is one of the most important services which is provided by an insurance company. That’s why knowing the reliability of a company regarding its claim settlement is very much necessary. A Claim Settlement Ratio acts as one of the most important yardstick to determine the claim settlement capacity of the life insurance company. Higher the claim settlement ratio, the more favorable it would be for the policyholder. That’s why one should always look for a higher Claim Settlement Ratio aspect before buying a life insurance policy.  However, this is one major aspect to ponder before buying a policy and other aspects must be looked upon as well along with “Claim settlement ratio” of the life insurance company.

How is Claim Settlement Ratio Calculated?

Claim Settlement Ratio is calculated by dividing the number of claims approved by the insurance company with the total number of claims received.

Claim Settlement Ratio = Numer of claims approved/Total number of claims received

Let us understand this with an example:

The XYZ Life insurance company received  1000 claims in the year 2015, out of which 900 claims were settled. So now, according to the formula of Claim Settlement Ratio

Number of claims received= 1000

Number of claims settled= 900

Therefore, Claim, Settlement Ratio= 900/1000

So, the CSR for XYZ company will be 90% for the year 2015

Check the latest Claim Settlement Ratio for the FY 2016-17

Claim Settlement Ratio of Life Insurance Companies for FY 2015-2016

S.No Life Insurance Companies Total no. of claims Claims paid CSR (2015-16)
1 LIC 761983 749249 98.33%
2 Max Life 9175 8895 96.95%
3 TATA AIA 3311 3205 96.80%
4 ICICI Prudential 11034 10615 96.20%
5 Aegon Life 533 508 95.31%
6 HDFC Standard Life 12430 11811 95.02%
7 Reliance Life 14618 13714 93.82%
8 SBI Life 16102 15037 93.39%
9 Canara HSBC OBC 571 531 92.99%
10 Bajaj Allianz Life 17967 16404 91.30%
11 Sahara Life 794 717 90.30%
12 Future Generali 1530 1381 90.26%
13 Exide Life 3233 2889 89.36%
14 Kotak Mahindra Old Mutual 2767 2465 89.09%
15 Birla Sunlife 7204 6372 88.45%
16 PNB Met Life 3094 2641 85.36%
17 Edelweiss Tokio 141 120 85.11%
18 IDBI Federal 1085 920 84.79%
19 Pramerica Life 550 460 83.64%
20 Aviva 1531 1255 81.97%
21 Star Union 1365 1102 80.73%
22 Bharti Axa 1261 1009 80.02%
23 India First 1891 1359 71.87%
24 Shriram Life 2510 1512 60.24%

Source: IRDAI Annual Report 2015-16

Key aspects about Claim Settlement Ratio:

  • Claim settlement Ratio issued by IRDAI does deal with the type of life insurance policy, i.e. whether the claim received are money back policy, endowment plan or term plan. CSR is just an average of all types of life insurance policies.
  • Higher the claim settlement Ratio, better are the chances of smooth claim settlement for the policyholder.
  • While Claim Settlement is a one of the most important parameters for analyzing a company, it shouldn’t be the only yardstick before buying a policy.
  • Every year, IRDAI issues an annual report on the insurance industry, which contains the details of the performance of insurance companies. This annual data contains the CSR of all the life insurance companies in India.
  • One should also check the consistency of the Claim Settlement Ratio because the ratio is not static but changes every year.
  • The insurance company is not always responsible for rejection of claim as there are many cases of impersonation, misrepresentation and fraud claims.

Check out this Articles: IRDAI Incurred Claims Ratio 2015-16  of General Insurance Companies in India

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