IRDA Claim Settlement Ratio 2018-19 – Which is the Best Life Insurance Company?
IRDA Claim Settlement Ratio 2018-19 – Which is the Best Life Insurance Company?
IRDA has released its annual report for 2018-2019 now, which contains latest Insurance Claim Settlement Ratios for 2018-19. Generally they would publish this report after 9 months, i.e. they were supposed to publish this in Jan-2020, however this year they are early. You might get doubt that in 2019 they are releasing 2018-2019 CSR details. IRDA analysis several details and publishes data after 9 months of completion of the financial year. What are the highlights of the Claim Settlement Ratios in IRDA annual report of 2018-19? Which is the Best Life Insurance Company based on the IRDA claim settlement ratio of 2018-2019?
Also Read: LIC Term Insurance Plan for One Crore
What is Claim Settlement Ratio (CSR)?
If you are already familiar about this, you can skip this section.
The 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 1000 claims during a year, but paid only 95 claims and rejected 50 claims, claim settlement ratio is 95%. Higher claim settlement ratio means, higher the acceptance by the insurance company for the life insurance claims during that year. 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 parameters in choosing a good life insurance policy.
Highlights of IRDA Claim Settlement Ratio 2018-19
I am producing some of the key highlights of the IRDA annual report about claim settlement ratios for 2018-19 pertaining to individual death claims.
1) The claim Settlement ratio of LIC is better than Private Life Insurance Companies even this year.
2) The LIC Claim Settlement Ratio has reduced from 98.04% (2017-18) to 97.79% (2018-19). Repudiation (Rejections) has marginally come down from 0.67% (2017-18) to 0.43% (2018-19). The difference between a claim paid and repudiation (rejections) are proposals pending.
3) Private Insurers Claim Settlement Ratio has gone up from 95.24% (2017-18) to 96.64% (2018-19). Repudiation has reduced from 3.97% (2017-18) to 2.83% (2018-19).
4) Overall industry claims settlement ratio marginally reduced from 97.68% (2016-17) to 97.64% (2018-19). Overall industry repudiation decreased from 1.1% (2017-18) to 0.74% (2018-19).
5) LIC Market shared reduced from 69.36% to 66.42% in terms of total premiums collected in the last 1 year. Private Insurance company’s premiums are at 33.42% out of total premiums collected.
6) Top 10 high claim settlement ratio insurance companies for 2018-19 are listed below.
Tata AIA – 99.07%
HDFC Life – 99.04%
Max Life – 98.74%
ICICI Life – 98.58%
LIC – 97.79%
Reliance Nippon – 97.71%
Kotak Life – 97.4%
Bharti Axa Life – 97.28%
Aditya Birla Sunlife – 97.15%
Exide Life – 97.03%
Claim settlement ratio of insurance companies for 2019 can be seen in IRDA annual report
Download IRDA Annual Report 2019 here
Other Highlights of IRDA Annual Report for 2018-2019
1) There were 70 insurance companies operating in India by end of Mar-2019, out of which 24 are in life insurance business, 27 general insurance, 7 are standalone health insurance and 12 are reinsurance companies including foreign re-insurers including Lloyds India. In 70 insurance companies, 8 are public sector insurance companies and balance 62 are private insurance companies.
2) The life insurance industry recorded a premium income of Rs 508,132 crores during 2018-19 as against Rs 458,803 Crores in the previous financial year, registering growth of 10.75%.
3) Growth from Single Premium Plans have reduced now and limited to 10.41% this year compared to 10.85% growth last year. LIC gets 32.8% of its total premiums from these plans.
4) Surprisingly, Unit linked insurance products (ULIPs) registered a growth of 17% premium from Rs 64,850 crores in 2017-18 to Rs 76,152 Crores in 2018-19.
5) Out of 24 life insurers operated in 2018-19, 20 reported profits for the financial year.
Best Life Insurance Companies for 2020 based on CSR of 2018-19
If you observe, there are several insurance companies where the claim settlement ratio was higher than 90% in earlier years, but the ratio is still increased higher. Fresh list of insurance companies coming in top 10. However, if you observe, only a few are still in the top 5 list. Hence, considering a good term insurance plan or life insurance product from top 5 list would be always better. Here are the top companies which are consistently having high life insurance claim settlement ratios.
Top#1 – HDFC Life Insurance
HDFC Life has high claim settlement for the past few years and stands in top-5. HDFC Life Insurance has launched several products, however, its term plans like HDFC Click 2 Protect Click 2 Protect 3 D Plus, retirement plan like Click 2 Retire, Health plan Click 2 Health have become famous owing to its good features.
HDFC click 2 Protect 3D Plus pure term insurance plan that comes with 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 aimed with disease and disability riders. A total of 9 options is 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 the lifelong protection option or 3D lifelong protection option.
Top#2 – MaxLife Insurance
Maxlife Insurance has been standing high in claim settlement ratios in the last few years. Some of its term plans like Max Life Online Term Plan have come popular.
Max Life Online Term Plan is a pure term 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.
It offers premium return term plans too, however, owing to several negative features about such plans, these have become unattractive now.
Top#3 – ICICI Life Insurance
ICIC Life insurance has been consistently in the top 5 insurance companies that has a high claim settlement ratio in India. There are several insurance products from ICICI Life, however 2 have become famous, ICICI iprotect term insurance plan and heart and cancer care plan.
Any individual who is in the 18 years to 65 years can consider this term insurance 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.
ICICI Heart and Cancer Protection plan is a health insurance plan that offers protection from heart and cancer diseases too.
Top#4 – Life Insurance Corporation (LIC)
LIC Claim settlement ratio of 2019 is 97.79%. Earlier LIC had e-Term insurance plan which is discontinued now. Recently it has floated Jeevan Amar and Tech Term Insurance Plans. However, LIC Tech Term insurance plan is famous among these two. This is a pure online term insurance plan. Minimum Sum Assured is Rs 50 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 a higher claim settlement ratio and having good brand, its premiums too are very high. One should consider this aspect before opting for the term insurance plan from LIC. Read this article, if you are confused between LIC Tech Term Vs Jeevan Amar.
Top#5 – Tata AIA
Tata AIA Life insurance is among the top-5 insurance companies that has high claim settlement ratios in India. If offers few term insurance plans, offline and online. We would cover the Best Tata AIA Term Insurance Plan in coming week’s articles.
Conclusion: If you are picking a best term insurance plan, there are several things to be considered. One key parameter among this is claim settlement ratio. One should note that we cannot do anything if claim settlement ratios are coming down from previous years. However, I observed, LIC, ICICI Life, HDFC Life and Max Life claim settlement ratios are always high and ranks in top-5. Hence, choosing a life insurance product from such high CSR companies would be always safe for your family who need to lead life even in your absence.
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IRDA Claim Settlement Ratio 2018-19 – Which is the Best Life Insurance Company
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May I bring to the notice of the author the following:
Please refer point no (6) of Highlights of IRDA Claim Settlement Ratio(CSR)
2018-19 says Top 10 High CSR Insurance companies are listed below: Mentions
TataAIA CSR as 99.07% and while ranking the Insurance companies he places HDFC life with 99.04% CSR as no 1(with out mentioning Tata AIA Life’s name in the ranking) which is totally misleading.
Request the author to give a corrigendum place Tata AIA Life placing in no 1(Top) position as soon as possible.
V S Kajjam
Hello VS Kajjam, We don’t give any ranking. It is already given as top-1 in the list. When we moved to the bottom of the article, it appeared in top-5 only list. The sequence is given based on not just CSR, but even considering all features. As an example, Tata AIA term insurance cannot be purchased online while all others we can buy online