IRDA Claim Settlement Ratio 2013-14-What does it mean?

IRDA Claim Settlement Ratio 2013-2014IRDA Claim Settlement Ratio 2013-14-What does it mean?


IRDA has released its annual report for 2013-2014 couple of days, which contains Claim Settlement Ratio 2013-14. This is an important factor, an individual has to consider while selecting a life insurance company. What are the highlights of the IRDA annual report of 2013-14 pertaining to claim settlement ratio? Which are the best insurance companies from the published list of IRDA claim settlement ratio of 2013-2014?

What is claim settlement ratio?


If you are already familiar about this, you can skip this section. Claim Settlement ratio is the ratio arrived by comparing the total claims paid over the  total claims received by the insurance company. If an insurance company has received 100 claims, but paid only 90 claims and rejected 10 claims, claim settlement ratio is 90%. High claim settlement ratio company is good for insured. Hence, individuals would prefer high claim settlement ratio insurance companies so that their claim is not rejected in the future.

Also Read: Should you opt for HDFC Click 2 Protect Plus Term Insurance?

IRDA Claim Settlement Ratio 2013-14 – Highlights


I am producing some of the highlights of the IRDA annual report about claim settlement ratios for 2013-14.

Highlights of Claim Settlement ratio of 2013-14 for individual death claims


  • Claim Settlement ratio of LIC is better than Private Life Insurance Companies.
  • LIC Claim Settlement Ratio has increased from 97.73% (2012-13) to 98.14% (2013-14). Repudiation (Rejections) has remained almost same and stands at 1.1% for 2013-14 compared to previous year. The difference between claim paid and repudiation (rejections) are proposals pending.
  • Private Insurers Claim Settlement Ratio has gone down slightly from 88.65% (2012-13) to 88.31% (2013-14). Repudiation has increased from 7.85% (2012-13) to 8.03% for 2013-14. Private Insurers repudiated 10,036 claims compared to LIC of 8,387.
  • Overall industry claim settlement ratio increased from 96.41% (2012-13) to 96.75% (2013-14). Overall industry repudiation remained same level at 2.08% in 2013-14 compared to previous year.

Some of the high claim settlement ratios companies for 2013-14 are listed below


  • LIC – 98.14%
  • ICICI Life – 94.10%
  • HDFC Life – 94.01%
  • Max Life – 93.86%
  • Star Union – 92.86%

Complete list is indicated below


IRD Claim Settlement Ratio-2013-2014-Company wise-1IRD Claim Settlement Ratio-2013-2014-Company wise-2Highlights of Claim Settlement ratio of 2013-14 for group death claims


  • LIC claim settlement ratio is 99.65% and private life insurance companies are at 90.45% for 2013-14.
  • While the LIC claims settlement ratio is 99.65%, other top claim settlement ratios are Birla Sun Life ratios are 99.95%, Bajaj Allianz 98.27% etc.,
  • Detailed list of insurance companies along with claim settlement ratios for group death claims is enclosed in below table.

IRD Claim Settlement Ratio-2013-2014-Group-Death Settlement-1IRD Claim Settlement Ratio-2013-2014-Group-Death Settlement-2

Also Read: Which are the Top and Best Term Insurance Policies in India

Other Highlights of IRDA 2013-14 report


Out of 24 life insurers operated for 2013-2014, 18 reported profits for the year. They are Aviva Life, Bajaj Allianz, Birla SunLife, Canara HSBC, DHFL Pramerica, EXIDE Life, HDFC Standard, ICICI Prudential, IDBI Federal, Kotak Mahindra, Max Life, PNB MetLife, Reliance Life, Sahara India, SBI Life, Shriram Life, Tata AIA and LIC of India. (Indicated in alphabetical order)

Conclusion: Claim Settlement Ratios are one of the key components in choosing a life insurance plan. Consider high claim settlement ratio insurance company. However, one cannot do anything if claim settlement ratios are coming down from previous year (where you would have brought insurance plans earlier). However, I observed, LIC, ICICI Life, HDFC Life are standard life insurance companies where claim settlement ratios are always high and ranks in top-5. I considered ICICI Term Insurance plan 6 months back taking this as one of the key points while other features do play role in selecting a good term insurance plan.

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Suresh
IRDA Claim Settlement Ratio 2013-14

10 comments

  • Guest

    Claims ratio is one positive factor, but should not be given high weightage.

    Look for;

    Maturity claims – ratio should be 100% (with profit policies have to be paid back on maturity, this is where the LIC’s high claim ratio comes from)

    Early claims – ratio should be 0% (these have to be necessarily investigated, adding to the cost of insurer)

    Surrender claims – ratio should be 0% (largely a result of mis-selling &/or loss of trust for insurer)

    Events claims – ratio should be the highest (this is the ratio a policy buyer should be concerned with, the very reason the policy is being bought)

    Alas! IRDAI does not provide the breakup of claim ratio data.

    Weightage should also be given to;

    ease of doing business with insurer
    features of policy
    premium cost
    month on month business growth of insurer
    avoid new insurance companies (as they lack past data for comparison)
    buy only term insurance (low cost), for profits buy balance mutual fund

  • Neil G

    Hi Sir,

    Pls advise on this Money Back plan from “Bharti AXA Aajeevan Sampatti” Whether this is a good product to buy in terms of the benefit to expense ratio in terms of premiums paid and returns obtained ?

    Looking forward eagerly to your valuable suggestions and comments on this..

    • Neil, These money back products offers 4% to 7% annualised returns. Instead prefer to take term insurance and invest balance in mutual funds. You can review it and take decision.

  • Karthikraja K

    What is group death claims?

  • nagendra

    Thanks for making us aware of this…

    I bought sbi life eshield term policy recently…

    Hope it was good decision… 🙂

  • Nithin

    I took Aegon Religare i-Term on several friends recommendationl and online reviews. However, looks like their name is not there anywhere in the list. What should I do with 6 month old term insurance? Do you recommend to go for one of the top 5, as it is going to be a long term plan.

    • You can review and subscribe to higher claim settlement ratio insurance company term policies like LIC, ICICI Pru life and HDFC Life which are always in top-3

      • JC

        I suggest go for Max Life increasing sum assured. Their premium is the lowest, term ends at 75 years and not 70 years as in the case of LIC and others. The percentages of claim settlement ratios are a bit misleading as indicated in the first quote. If you wish to know more reasons, please call 9910097974 (Delhi, India)

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