Claim Settlement ratio is one of the important factor while purchasing any insurance policy. One can find claim settlement ratio information in IRDA (Insurance Regulatory Development Authority) annual report. This year annual report is recently released by IRDA and LIC is declared as Best in terms of claim settlement ratio for 2015. Let’s try to demystify claim settlement ratio and its importance.
What is Claim Settlement Ratio?
Claim settlement ratio means a number of claims that insurance company has settled or paid on the claim/ death of policy holder. If 1000 claims are made in a year and 960 claims are settled claim settlement ratio of the company will be 96%.
Claim settlement ratio is one of the factors in rating insurance companies. Higher the claim settlement ratio means insurance company is trustworthy and reliable, whereas the low ratio indicates that the insurance company is less reliable in the claim settlement.
LIC is best in terms of Claim Settlement
LIC (Life Insurance Corporation of India) is again rated as best in terms of claim settlement ratio. Last year in 2013-14 report claim settlement ratio of LIC was 98.14% and this year as per IRDA report LIC again tops with settlement ratio of 98.19% in the year 2014-15. LIC performance is best in terms of CSR (Claim settlement ratio) because the company is in core life insurance business since many year.
CSR of LIC is higher, however products offered by LIC is average and may not give you decent returns. Apart from LIC other insurance company like Max Life, Birla Sunlife, Tata AIG, Star Union Dai-lchi and ICICI Prudential Life is also rated best this year in terms of claim settlement ratio.
IRDA Claim Settlement Ratio 2014-15
- LIC, Max Life and Birla Sunlife are top life insurance companies in terms of claim settlement ratio (2014-15).
- Ten private insurers registered a settlement ratio above 90%, with LIC is leading the chart at 98.19% followed by Max Life 96.03%,Birla Sun Life (95.3%), Tata-AIA Life (94.47%), Star Union Dai-ichi Life (94.08%) and ICICI Prudential Life (93.8%).
- SBI Life, Aegon Life, Canara HSBC Oriental Life and Exide Life, recorded a claim settlement ratio of over 80%.
- Shriram Life, Edelweiss Tokio and DLF are worst in terms of claim settlement ratio and you should avoid these companies.
- A number of claims received and paid by LIC is highest compare to all other insurance company. This makes LIC is most popular and trustworthy insurance company of India.
- This claim settlement ratio does not give insight about claim paid for types of insurance policies like term plan, endowment plan etc.
Point to remember before purchasing Insurance Policy –
- Use claim settlement ratio as one of the factors while buying an insurance policy. CSR should not be the only factor for deciding Life Insurance Company.
- Compare at least last three years CSR to get a fair idea about the insurance company.
- Apart from claim settlement ratio, you should also look at average claim settlement time. Average time should be less than or equal to 30 days.
- Compare all other features of the insurance policy before buying.
- It is very good idea to buy a term plan for high-risk coverage.
Hope details of IRDA claim settlement ratio 2015 will be useful to you. Do share your queries in the comment section.
For more information refer to IRDA Annual Report 2014-15.