Life Insurance – Claim Settlement Ratio – 2010-11

Claim Settlement Ratio is probably the most important factor while buying insurance. This becomes even more critical for Life Insurance as you would like your dependents to run pillar to post to claim your sum assured in case of unfortunate death. The recently published Insurance Regulatory And Development Authority - IRDA Annual report 2010-11 has the settlement ratio for the following life insurance companies in India.

LIC	Metlife	Canara HSBC
HDFC Life	Aviva	IDBI Fedral
Birla Sunlife	SBI Life	Shriram
ICICI Prudential	India First	Sahara
ING Life	Tata AIG	Aegon Religare
Kotak Mahindra	Reliance Life	DLF Pramerica
Bajaj Allianz	Star Union Dai-ichi Life	Future Generali
Bharti AXA	Max New York

Claim Settlement Ratio :-

The table below gives the Settlement ratio for the above Life Insurance Companies:

As you can see LIC (Life Insurance Corporation) has the best Claim Settlement Ratio of more than 97% while Future Generali has the worst payout ratio of 50.5%.  But before you focus too much on these numbers, here are a few points you need to think about:

Life insurance companies have a very high rate of rejection in the ‘early claims’ – so if there is a claim made within 2 years of taking the policy, there is a far greater chance of it being rejected. So all the companies which have started operation in last five years would obviously have low settlement ratio.

The data does not tell what kind of claims is being talked about? Is it only death claim or also included maturity claim. As you are aware that maturity claims cannot be anyway be rejected, so its unfair to club both death claim and maturity claim. IRDA should make provision for publishing this separately.

So read the above Claim Settlement Ratio numbers with a pinch of salt!

You can read the previous claim settlement ratio for life Insurance companies for 2008-09.