The Insurance Regulatory and Development Authority of India (Irdai) has published the details of claim settlements of all life insurance companies for the year 2021-22 in its annual report. As per this latest data, life insurance companies in India have registered a slight improvement in their individual death claim settlement record in 2021-22 compared to a year earlier, which was an extra ordinary year due to covid-19 related deaths. The individual death claim settlement ratio of the life insurance industry increased to 98.64 per cent in 2021-22 from 98.39 per cent in the previous year, as per Irdai’s report.
|Individual death claims settlement by % of policies|
|Life Insurer||Total claims||Claims paid||Claims repudiated|
|No. of policies||No. of policies||% of total claims||No. of policies||% of total claims|
|Aditya Birla Sun Life||10008||9815||98.07||186||1.86|
|Bharti Axa Life||3203||3174||99.09||27||0.84|
|PNB Met Life||8586||8357||97.33||224||2.61|
|Tata AIA Life||8069||7950||98.53||117||1.45|
Source: Irdai Annual Report 2021-22
* As claimed by Shriram Life Insurance
Max Life Insurance has the highest claim settlement ratio in terms of the number of claims with 99.34 per cent for the year 2021-22. With a 99.09 per cent death settlement ratio, Exide Life insurance and Bharti Axa Life Insurance bagged the second position. As many as 14 life insurers have a claim settlement ratio of more than 98 per cent.
All the private life insurance companies had together settled 2.37 lakh death claims while LIC alone settled 13.49 lakh death claims in 2021-22, as per the Irdai report. In terms of benefit amount paid, private insurers settled Rs 17,410 crore whereas LIC settled Rs 28,408 crore in 2021-22. In terms of numbers, LIC registered a 98.74 per cent claim settlement ratio and in terms of benefit amounts, the insurer maintained a 96.02 per cent claim settlement ratio.
Also Read: Latest health and general insurance claim settlement ratio of companies in IndiaThe claims repudiated ratio indicates how many claims the insurer finds to be invalid and hence, has not paid the claimed amount. There are many reasons a life insurance company will repudiate a claim after it has accepted it for processing.
|Individual death claims settlement by % of benefit amount|
|Life insurance company||Total no. of claims||Total amount of claim (cr)||No. of claims paid||Amount of claims paid (cr)||% No. of claims paid||% amount of claims paid|
|Bharti Axa Life||3203||243.59||3174||234.72||99.09%||96.36%|
|Tata AIA Life||8069||1603.93||7950||1518.17||98.53%||94.65%|
|Aditya Birla Sun Life||10008||880.32||9815||846.43||98.07%||96.15%|
|PNB Met Life||8586||717.43||8357||669.69||97.33%||93.35%|
Source: Irdai Annual Report 2021-22
*As claimed by Shriram Life Insurance
Disclaimer: As per the Irdai Annual Report 2021-22, Shriram Life Insurance’s claim-settlement ratio by number of policies was 82.39 per cent and the claim-settlement ratio by amount was 95.82 per cent. However, the insurer said that there was a mistake in the numbers in the Irdai report. We have changed numbers accordingly as claimed by the insurer. ET was not able to independently verify these numbers.
Check claim paid ratio by the amount
The claims paid ratio by amount indicates the percentage of the total value of claims submitted to an insurance company that is ultimately paid out. A high ratio would suggest that the company is paying out a large proportion of the total value of claims submitted to it, while a low ratio would suggest that the company is denying or delaying many claims. Both claim paid ratio by numbers and claim paid ratios by amount are used to measure the financial performance of an insurance company, and to assess its ability to pay out claims to policyholders.
“Claims paid ratio by numbers can be useful for policyholders who want to get a sense of how easy it is to file and have claims processed and paid by the insurer. On the other hand, the claims paid ratio by amount can be useful for policyholders who are more interested in the amount of money they might expect to receive if they file a claim,” said Sanjiv Bajaj, Jt. Chairman & MD, Bajaj Capital.
“It’s always best for the policyholder to check and compare both ratios before buying the policy to have a comprehensive understanding of the insurer’s claims-paying ability,” he added.
“It is highly recommended that customers must ensure to check all the reasonably dependable measurement indicators like claims paid ratio by amount, the experience provided by the insurer and how long the insurer takes to settle the claims,” said Tarun Mathur, Chief Business Officer – General Insurance, Policybazaar.com