Posted by What is Claim Settlement Ratio?
In the simple words claim settlement ratio is defined as the percentage of insurance claims settled by an insurer compared to the total number of received claims. In other words, we can understand the claim settlement ratio reveals the percentage of claims the insurance company has paid out during the financial year.
Let understand CSR with the example, if a life insurance company receives 2000 death claims and settles 1998, the claim settlement ratio of that company would be 99.9%. It means higher the claim settlement ratio of the insurer, the more favourable it would be for individuals.
The CSR is calculated with the help of the following formula:
Claim settlement ratio = (Number of claims settled/Number of claims received) x 100
Check the table below shows IRDAI’s death claim settlement ratio of life insurers for the year 2018-19
Check the latest death claim settlement ratio of the 24 life insurance companies in India in descending order.
| S.No. | Life insurers | Death claim settlement ratio (%) |
|---|---|---|
| 1 | TATA AIA Life Insurance | 99.07 |
| 2 | HDFC Life Insurance | 99.04 |
| 3 | Max Life Insurance | 98.74 |
| 4 | ICICI Prudential Life Insurance | 98.58 |
| 5 | Life Insurance Corporation | 97.79 |
| 6 | Reliance Nippon Life Insurance | 97.71 |
| 7 | Kotak Life Insurance | 97.4 |
| 8 | Bharti Axa Life Insurance | 97.28 |
| 9 | Aditya Birla Sun Life Insurance | 97.15 |
| 10 | Exide Life Insurance | 97.03 |
| 11 | DHFL Pramerica | 96.8 |
| 12 | Star Union Daichi Life Insurance | 96.74 |
| 13 | Aegon Life Insurance | 96.45 |
| 14 | PNB MetLife Insurance | 96.21 |
| 15 | Aviva Life Insurance | 96.06 |
| 16 | Edelweiss Tokio Life Insurance | 95.82 |
| 17 | IDBI Federal Life Insurance | 95.79 |
| 18 | Future Generali Life Insurance | 95.16 |
| 19 | SBI Life Insurance | 95.03 |
| 20 | Bajaj Allianz Life Insurance | 95.01 |
| 21 | Canara HSBC OBC | 94.04 |
| 22 | India First Life Insurance | 92.82 |
| 23 | Sahara India Life Insurance | 90.16 |
| 24 | Shriram Life Insurance | 85.3 |
Source: IRDAI Annual Report 2018-19
Check the IRDAI death claim settlement ratio of life insurers for the year 2018-19, 2012-13
| Company | 2018-19 | 2017-18 | 2016-17 | 2015-16 | 2014-15 | 2013-14 | 2012-13 |
|---|---|---|---|---|---|---|---|
| TATA AIA Life | 99.07% | 98.00% | 96.01% | 96.80% | 95% | 89.68% | 84.46% |
| Max Life | 98.74% | 98.26% | 97.81% | 96.95% | 96.03% | 93.86% | 94.25% |
| ICICI Prudential | 98.58% | 97.88% | 96.68% | 96.20% | 94% | 94.01% | 96.29% |
| LIC | 97.79% | 98.04% | 98.31% | 98.33% | 98% | 98.14% | 97.73% |
| Reliance Life | 97.71% | 95.17% | 94.53% | 93.82% | 84% | 81.97% | 86.45% |
| Kotak Mahindra | 97.40% | 93.72% | 91.24% | 89.09% | 91% | 90.69% | 92.04% |
| Bharti Axa Life | 97.28% | 96.85% | 92.37% | 80.02% | 81% | 88.13% | 89.48% |
| HDFC Standard | 97.15% | 97.80% | 97.62% | 95.02% | 91% | 94.01% | 95.76% |
| Birla Sunlife | 97.15% | 96.38% | 94.69% | 88.45% | 96% | 87.76% | 82.55% |
| Exide Life | 97.03% | 96.81% | 96.40% | 89.36% | 86% | 83.16% | N/A |
| DHFL Pramerica | 96.80% | 96.62% | 90.87% | 83.64% | 57% | 22.14% | 27.04% |
| Star Union Daichi | 96.74% | 92.26% | 84.05% | 80.73% | 94% | 92.86% | 89.70% |
| Aegon Religare | 96.45% | 95.67% | 97.11% | 95.31% | 90% | 81% | 66.82% |
| PNB Metlife | 96.21% | 91.12% | 87.14% | 85.36% | 93% | 90.24% | 83.87% |
| Aviva Life | 96.06% | 94.45% | 90.60% | 81.97% | 83% | 84% | 67.35% |
| Edelweiss Tokio | 95.82% | 95.24% | 93.29% | 85.11% | 57% | 60% | 45.45% |
| IDBI Federal Life | 95.79% | 91.99% | 90.33% | 84.79% | 72% | 90.34% | 80.06% |
| Future Genrali | 95.16% | 93.11% | 89.53% | 90.26% | 84% | 74.88% | 70.53% |
| SBI Life | 95.03% | 96.76% | 96.69% | 93.39% | 89% | 91.06% | 94.41% |
| Bajaj Allianz | 95.01% | 92.04% | 91.67% | 91.30% | 92% | 91.29% | 88.67% |
| Canara HSBC | 94.04% | 95.22% | 94.95% | 92.99% | 90% | 86.76% | 88.44% |
| India First Life | 92.82% | 89.83% | 82.65% | 71.87% | 72% | 73.13% | 71.40% |
| Sahara Life | 90.16% | 82.74% | 90.21% | 90.30% | 90% | 90.19% | 84.71% |
| Shriram Life | 85.30% | 80.23% | 63.53% | 60.24% | 67% | 67.69% | 67.35% |
Above mentioned data are taken from IRDA website.
FAQ’S
1. What is the claim ratio?
Total Claims per Period / Total Earned Premiums per Period
2. What is a good claim ratio?
A company with a ratio in the range of 90 % to 97 % is more reliable than a company with a claim settlement ratio in the range of 75 % to 90 %
3. Where is claim settlement ratio IRDA?
The most reliable source for checking the claim settlement ratio of life insurance companies is the IRDAI Annual Report. Which is annually released by IRDA.
4. What is the procedure regarding the settlement of claims?
Claims can be reported online at branches or at the central office or calling at the toll-free number. After validation of all the documents, then the final settlement takes place.
5. Which company has the highest claim settlement ratio?
Tata AIA life insurance has the highest claim settlement ratio of 99.07%
6. Which insurance company is best for claims?
- TATA AIA Life Insurance
- HDFC Life Insurance
- Max Life Insurance
- ICICI Prudential Life Insurance
- Life Insurance Corporation
- Reliance Nippon Life Insurance
- Kotak Life Insurance
- Bharti Axa Life Insurance
- Aditya Birla Sun Life Insurance
- Exide Life Insurance
7. What is incurred claim ratio?
Incurred Claim Ratio or ICR is the proportion of claims paid out against the total amount of premiums received during a particular financial period.
8. What is the claim settlement ratio of LIC?
98.04%
9. What is a claim life cycle?
- submission
- processing
- adjudication
- payment/denial
10. Why do insurance claims get rejected?
- Providing wrong information in the application form
- Non-disclosure of medical history
- Not Updating Nominee Information
- Policy lapse due to not paying premiums on time
- Not providing information on existing policy
11. What is the turn around the time period of a settlement insurance claim?
- Maturity claim will take 15 days
- Death claim settlement without investigation requirement will take 30days
- Death claim settlement with investigation requirement will take 120days
12. What is an expense ratio in insurance?
The expense ratio in the insurance industry is calculated by dividing the expenses including (acquiring, underwriting, and servicing premiums) by the net premiums earned by the insurance company.
13. Can insurance companies reject claim after 3 years?
According to Section 45, no claim can be rejected after 3 years of the policy being in force even if any fraud is detected.
