Claim Settlement Ratios of Life Insurance Companies in India
Presently, 24 companies sell life insurance plans in India. Of all these 24 providers, the only provider under public sector is the LIC of India. The rest of the 23 companies are either private or JVs between national or international insurance/finance companies and private or public sector banks/financial institutions.
The access to life insurance sector was given to the private life insurers in the year 2000. Also, most of the private insurers have partnered with the international insurance players to bring up their insurance venture.
An important parameter to judge the middle insurance company is by its Claim Settlement Ratio.
What is Claim Settlement Ratio?
A Claim Settlement Ratio (CSR) is the ratio of the total number of claims that an insurance provider settles to the total number of claims it receives in a year. CSR for life insurance providers is issued by the Insurance Regulatory and Development Authority (IRDA) of India, every year.
The formula to calculate the Claim Settlement Ratio is as follows:
Claim Settlement Ration = Total number of claims approved and paid by the insurer/Total number of claims received by the insurance company*100
For example, if the number of death claims received by the insurance provider is 1000, out of which it settles 980, the Claim Settlement Ration of that provider would be 98%.
Claim Settlement Ratio = (980÷1000) x 100 = 98%
The higher the CSR of the insurer, the better it is for its customers.
Claim Settlement Ratio of Life Insurance Providers for 2016-17:
|
Insurer |
Death Claims Received |
Death Claims Paid |
Claims Rejected/Repudiated |
Claims Written Back |
Claim Pending |
Claim Settlement Ratio (CSR in %age) |
|
LIC |
769,386 |
756,399 |
7,432 |
2,352 |
3,203 |
98.31 |
|
Max Life |
9,821 |
9,606 |
212 |
0 |
3 |
97.81 |
|
HDFC Standard Life |
12,725 |
12,421 |
244 |
0 |
59 |
97.62 |
|
Aegon Life |
588 |
571 |
17 |
0 |
0 |
97.11 |
|
SBI Life |
17,610 |
17,027 |
451 |
0 |
132 |
96.69 |
|
ICICI Prudential |
10,901 |
10,539 |
305 |
21 |
36 |
96.68 |
|
Exide Life |
2,973 |
2,866 |
107 |
0 |
0 |
96.40 |
|
Tata AIA |
2,707 |
2,599 |
108 |
0 |
0 |
96.01 |
|
Canara HSBC Oriental |
653 |
620 |
32 |
0 |
1 |
94.95 |
|
Birla Sunlife |
6,048 |
5,727 |
240 |
33 |
48 |
94.69 |
|
Reliance Nippon |
11,079 |
10,473 |
529 |
42 |
35 |
94.53 |
|
Edelweiss Tokio |
164 |
153 |
11 |
0 |
0 |
93.29 |
|
Bharti AXA |
878 |
811 |
33 |
0 |
34 |
92.37 |
|
Bajaj Allianz |
16,239 |
14,887 |
932 |
357 |
63 |
91.67 |
|
Kotak Mahindra |
2,831 |
2,583 |
99 |
130 |
19 |
91.24 |
|
DHFL Pramerica |
471 |
428 |
36 |
1 |
6 |
90.87 |
|
IDBI Federal |
1,065 |
962 |
96 |
0 |
7 |
90.33 |
|
Sahara Life |
725 |
654 |
45 |
0 |
26 |
90.21 |
|
Future Generali India |
1,366 |
1,233 |
126 |
0 |
17 |
89.53 |
|
PNB Metlife India |
3,879 |
3,380 |
357 |
34 |
108 |
87.14 |
|
Star Union Daichi |
1,473 |
1,238 |
200 |
16 |
19 |
84.05 |
|
India First |
1,741 |
1,439 |
273 |
0 |
29 |
82.65 |
|
Shriram Life |
2,926 |
1,859 |
774 |
0 |
293 |
63.53 |
The claim settlement ratio for the sector, on the whole, stands at 97.74% for 2016-17. There has been a growth from the CSR of 97.43% for 2015-16. The claim rejection ratio decreased to 1.45% when compared to 1.73% in 2015-16.
The report by IRDA also implies that the CSR of LIC was 98.31% at March-end in 2017. This was 98.33% on March 31, 2016. The claim rejection ratio for LIC has gone down marginally and is at 0.97% currently. This ratio was 0.98% at end of the fiscal year 2015-16.
For all the private insurance companies in India, the Claim Settlement Ratio has noticed a definitive growth of 2.24%. The ratio for the fiscal year 2016-17 is 93.72%, while in the previous financial year it was 91.48%. The claim repudiation ratio also came down to 4.85% for 2016-17 from 6.67% for the fiscal year 2015-16.
