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claim settlement ratio 161 views October 27, 2020
A life insurance policy helps the nominee get the sum assured if you die during the policy term. The nominee can be any of your family members. Similarly, health insurance companies offer you financial cover when you and your family members get hospitalized. Therefore, you need to know which insurance company has paid their claims on time over the years. It is an important parameter to check when you are buying a policy. And in this post, we will learn where and how to check the claim settlement ratio in India. So, read and find out!
Table of Contents
Check Your Claim Settlement Ratio in IRDAI
The Insurance Regulatory and Development Authority of India (IRDAI) safeguards consumer interests by publishing the claim settlement ratio of insurance companies for each year. In the IRDAI annual report, you can find the claim settlement ratio of different insurers. You can also check the details of the individual and group death claims ratio separately on the IRDAI annual report for each company.
Download IRDAI Annual Report
Follow the below steps and download the IRDAI annual report, which will be in both English and Hindi format.
- Visit the official website of the IRDAI
- Select report from the left column
- Click on ‘Annual Report’
- You will be redirected to a new page
- Select the annual report and download it as per the specific financial year
What is a Claim Settlement Ratio?
The company’s claim settlement ratio is an indicator that shows how many claims it has settled in a financial year. This is calculated by dividing the total number of claims settled by the total number of claims received. For instance, if the insurer received 100 death claims in a financial year and has settled 95 claims, the claim settlement ratio will be 95%. This means that the remaining 5% of claims were either rejected or pending. So, if the company claim settlement ratio is higher, there are greater chances of your claim getting settled on time.
What is the Importance of Claim Settlement Ratio?
A company’s claim settlement ratio represents its credibility in claim payments. If the company claims settlement ratio is high, this means the company settles a maximum number of its claims which is a favorable aspect for you. There will be a higher probability of you getting the claim settled. Whereas if the ratio is low, it means the insurer settles a limited number of claims. This does not give a good impression of the insurance company. Thus, the claim settlement ratio helps you find which of the insurance companies is good in terms of claim settlement.
Insurance Companies Claim Settlement Ratio
A life insurance policy ensures financial security for your family and loved ones in your absence. To choose the best life insurance policy, you must check the claim settlement ratio. A company with a higher ratio is better compared to the one with a lower ratio. Have a look at the table and know the claim settlement ratio of the top life insurance companies for 2017-18 in India.
| Name of the company | Claim Settlement Ratio |
|---|---|
| Life Insurance Corporation of India | 98.04% |
| HDFC Life Insurance Company Limited | 97.80% |
| Max Life Insurance Company Limited | 98.26% |
| ICICI Prudential Life Insurance Company Limited | 97.88% |
| Kotak Mahindra Life Insurance Company Limited | 93.72% |
Similarly, a health insurance policy will give you cover for hospitalization expenses. So, there will be no shortage of funds should you face any medical emergency. And in the process of its selection, claim settlement will help you understand how much claims the insurer has paid in the previous year. Check out the table below and know the claim settlement ratio of health insurance companies for 2018-19.
| Name of the company | Claim Settlement Ratio |
|---|---|
| Star Health and Allied Insurance Co Ltd. | 78.52% |
| Care Health Insurance | 92.58% |
| Apollo Munich | 84.10% |
| MAX Bupa | 83.92% |
| Aditya Birla Health | 72.80% |
However, this is not the only factor that helps you choose the best policy. Other features and benefits of the insurance policy must be taken into account when you are comparing the insurance policies. This is because of the following reasons –
- The claim settlement ratio lets you know the number of claims settled. It does not indicate the time period of the settlement.
- If a claim is received on 28th March and settled in April, that claim will go down as ‘Unsettled’ for the particular financial year. And there can be many such claims.
- Besides the claim settlement ratio, compare other aspects of the policy too. These would include coverage, benefits, premium rate, policy duration, available riders, etc.