Highlights of IRDA Claim Settlement Ratio 2016-17 – How is your insurance company doing?

Highlights of IRDA Claim Settlement Ratio 2016-17 – How is your insurance company doing?


IRDA has released its annual report for 2016-2017 last week end, which contains Insurance Claim Settlement Ratio 2016-17. One of the key parameter which one would use in choosing a best insurance plan is Claim Settlement Ratio(CSR). LIC share is reduced in 2016-17 compared to previous year. Some of the insurance companies which was in top-10 Claim settlement ratio are down now. What are the highlights of the IRDA annual report of 2016-17 pertaining to claim settlement ratios? Which are the best insurance companies from the published list of IRDA claim settlement ratio of 2016-2017? How is your insurance company doing? How many applications your insurance company is rejecting? Every insured individual should read this article not just for gaining knowledge, but also to know what may happen in future to their family while claiming insurance in his/her absence.

Also Read: LIC launches Jeevan Shiromani Insurance Plan – Should you opt?

What is Claim Settlement Ratio (CSR)?


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 during a year, but paid only 95 claims and rejected 5 claims, claim settlement ratio is 95%. Higher claim settlement ratio means, higher the acceptance by insurance company for the claims. Hence, individuals would prefer high claim settlement ratio insurance companies so that their claim is not rejected in the future. This is one of the key parameter in choosing a best insurance plan.

Highlights of IRDA Claim Settlement Ratio 2016-17 – How is your insurance company doing?


I am producing some of the key highlights of the IRDA annual report about claim settlement ratios for 2016-17 pertaining to individual death claims.

1) Claim Settlement ratio of LIC is better than Private Life Insurance Companies even this year.

2) LIC Claim Settlement Ratio has increased from 98.33% (2015-16) to 98.31% (2016-17). Repudiation (Rejections) has marginally came down from 0.98% (2015-16) to 0.97% (2016-17). The difference between claim paid and repudiation (rejections) are proposals pending.

3) Private Insurers Claim Settlement Ratio has gone up from 91.48% (2015-16) to 93.72% (2016-17). Repudiation has reduced from 6.67% (2015-16) to 4.85% (2016-17). Private Insurers repudiated 9,486 claims compared to LIC of 8,689.

4) Overall industry claim settlement ratio increased from 97.43% (2015-16) to 97.74% (2016-17) which is really a god news. Overall industry repudiation decreased from 1.73% (2015-16) to 1.45% in 2016-17.

5) LIC Market shared reduced from 72.6% to 71.8% in terms of total premiums collected. Private Insurance companies premiums is at 28.2% out of total premiums collected.

6) Top 10 high claim settlement ratio insurance companies for 2016-17 are listed below.

1) LIC – 98.31%

2) Max Life – 97.81%

3) HDFC Life – 97.6%

4) Aegon Religare – 97.11%

5) ICICI Life – 96.68%

6) SBI Life – 96.6%

7) Exide Life – 96.4%

8) Tata AIA – 96%

9) Canara HSBC OBC – 94.95%

10) Birla Sunlife – 94.69%

Also Read: Best Term Insurance Plans in India for 2018

Claim Settlement Ratio of all insurance companies are listed here


List-1 of IRDA Claim Settlement Ratio 2016-17 – How is your insurance company doing-min

Other Highlights of IRDA Report of 2016-2017


1) There were 62 insurance companies operating in India by end of Mar-2017, out of which 24 are in life insurance business, 23 general insurance, 6 in health insuranceonly and 9 are reinsurance companies including foreign reinsurers including Lloyds India.  In 62 insurance companies, 8 are public sector insurance companies and balance 54 are private insurance companies.

2) Life insurance industry recorded a premium income of Rs 418,476 crores during 2016-17 as against 366,943 Crores in the previous financial year, registering growth of 14%.

3) Single Premium Plans continue to play as major role and LIC gets 27.8% of its total premiums from these plans.

4) Interestingly, Unit linked insurance products (ULIPs) registered a growth of 13% premium from Rs 46,889 crores in 2015-16 to Rs 52,845 Crores in 2016-17.

5) Out of 24 life insurers operated for 2016-2017, 18 reported profits for the year. They are Bajaj Allianz, Birla SunLife, Canara HSBC Life, DHFL Pramerica, EXIDE Life, HDFC Standard, ICICI Prudential, IDBI Federal, India First Life, Kotak Mahindra, Max Life, PNB MetLife, SBI Life, Sahara India Life, Shriram Life, Tata AIA and LIC of India. (Indicated in alphabetical order).

Which is the Best Insurance Company you can opt based on Claim Settlement Ratio(CSR)?


If you observe, there are several insurance companies where the claim settlement ratio was higher than 90% in earlier years, but now dropped. Fresh list of insurance companies coming in top 10. However, if you observe, only few are still in top list. Hence considering term insurance plan or life insurance product from top 4-5 list would be always better. Here are the top companies which are consistently having high claim settlement ratios.

Top# 1 – Life Insurance Corporation (LIC) – Claim Settlement Ratio – 98.3% (2016-2017)


There are several insurance products, however many still believe in taking a good term insurance plan and balance invest in various investment options including mutual funds. One of the best plan from LIC is LIC’s e-Term Insurance plan. This is a pure term insurance plan.  Minimum Sum Assured is Rs 25 Lakhs. Any individual who is in the 18 years to 60 years can consider this term insurance plan. Policy is available for 10 years to 35 years. Since LIC is having high claim settlement ratio, its premiums too are very high. One should consider this aspect before opting for the term insurance plan from LIC. You can read the LIC e-Term Insurance Plan review here.

Top#2 – ICICI Life Insurance – Claim Settlement Ratio – 96.6% (2016-2017)


ICIC Life insurance has consistently in the top 5 high claim settlement ratio companies in India. There are several insurance products from ICICI Life, however 2 have become famous, iprotect term insurance plan and heart and cancer care plan.

ICICI iProtect Smart Term Insurance plan offers death benefit, critical illness benefit and waiver of premium on disability. This term insurance plan covers 34 critical illnesses along with accidental benefit. If a 30 years individual opting for this plan for Rs 50 Lakhs sum assured for 30 years, the annual premium works out to be 5,200 (Approx).

ICICI Heart and Cancer Protection plan is a health insurance plan that offers protection from heart and cancer diseases too. An individual of 30 years can opt for Rs 20 Lakhs health insurance plan (Rs 10 Lakhs for heart and Rs 10 Lakhs for cancer) and premium works out to be Rs 6,200 per annum.

Top#3 – HDFC Life Insurance – Claim Settlement Ratio – 97.6% (2016-2017)


HDFC Life too has been having high claim settlement and has been standing in the top-5 claim settlement companies. HDFC Life has launched several products, however its term plans like HDFC Click 2 Protect or Click 2 Protect 3 D Plus and retirement plan like Click 2 Retire have become famous owing to its good features.

HDFC click 2 Protect 3D Plus is a non-linked insurance plan which comes with several unique features. In this plan, 3D refers to the protection against 3 Ds of life i.e. Death, Disease and Disability. So, it is basically a term insurance plan which has been decorated with disease and disability riders. A total of 9 options are available under this new plan. In case of Accidental Total Permanent Disability or on diagnosis of critical illness (available under few options), all the future premiums are waived.  One can protect himself for the entire life with lifelong protection option or 3D lifelong protection option. If a 30 years individual opting for Rs 50 Lakhs sum assured for 30 years tenure, the premium works out to be Rs 9,300 without additional riders.

HDFC Click 2 Retire is an online ULIP which comes with low ULIP charges, hence it has become popular retirement product.

Top#4 – MaxLife Insurance – Claim Settlement Ratio – 97.8% (2016-2017)


Maxlife Insurance has been standing high in claim settlement ratios in the last few years. Some of its products like Max Life Online Term Plan has come popular. However, some of its products like premium return term plan was unattractive plan.

Max Life Online Term Plan is a pure term insurance plan. This insurance plan protects against death of the policy holder. This plan is available in 3 options. Basic Cover, Life Cover with Monthly Income Plan and Life Cover with Increasing Monthly Income plan. Additional protection with comprehensive accident benefit riders.  Low premiums for non-tobacco users. High Sum Assured have discount on premium. For a 30 years male, and Rs 50 Lakhs sum assured, the annual premium works to be Rs 5,000 (approx.) without any riders. Max Life Online Term Insurance Plan is one of the best Term Plan.

Conclusion: While Claim Settlement Ratio is not the only criteria, it is 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 claim settlement ratios are always high and ranks in top-5. Hence choosing a good term insurance plan or life insurance product from such companies would not disappoint insured families later when the claims are made.

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Suresh

Highlights of IRDA Claim Settlement Ratio 2016-17 – How is your insurance company doing?

2 comments

  • Jignesh

    You have not given recommendaion for aegon life insurance though it has good ratio 97.11.  Why? 

    • Hi Jignesh, It had low claim settlement ratio till 2 years back (FY11-52%, FY12-66%, FY13-67%, FY14-81%, FY15-90%, FY16-95%). Last year and this year its CSR is high (Over 95%), hence I am neutral on this now and not commented in our top list.

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