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Life Insurance Claim Settlement Ratio 2019-2020 [Published in 2021]
IRDA has released its annual report for 2019-2020 now, which contains life Insurance Claim Settlement Ratios for the year 2019-20. Generally they would publish this report after 9 months, i.e. they were supposed to publish this in Jan-2021, however this year they are little late. IRDA analyze several details and publishes data after 9 months of completion of the financial year. In this article we would provide highlights of IRDA annual report and also provide Life Insurance claim settlement ratio (CSR) for 2019-2020 for both LIC as well as for private insurance companies.
Also Read: Best LIC Term Insurance Plans for 1 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 950 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 2019-2020 (CSR)
Here are the key highlights of the IRDA annual report about claim settlement ratios for 2019-2020 pertaining to individual death claims.
1) The claim Settlement ratio of LIC has fallen this year compared to Private Life Insurance Companies. The LIC Claim Settlement Ratio has reduced from 97.79% (2018-19) to 96.69% (2019-2020). Repudiation (Rejections) has marginally increased from 0.43% (2018-19) to 0.81% (2019-2020). The difference between a claim paid and repudiation (rejections) are proposals pending.
2) Private Insurers Claim Settlement Ratio has gone up from 96.64% (2018-19) to 97.18% (2019-2020). Repudiation has reduced from 2.83% (2018-19) to 2.42% (2019-2020).
3) Overall industry claims settlement ratio, reduced from 97.64% (2018-19) to 96.76% (2019-2020). Overall industry repudiation increased from 0.74% (2018-19) to 1.02% (2019-2020). This means life insurance companies are rejecting more claims compared to previous years.
4) LIC Market shared marginally decreased from 66.42% to 66.22% in terms of total premiums collected in the last 1 year. Private Insurance company’s premiums are at 33.78% out of total premiums collected.
Download IRDA Annual Report 2020
Life Insurance Claim Settlement Ratio in 2021 (FY 2019-2020)
Here are the list of insurance companies and their claim settlement ratio of 2019-2020.
| Claim Settlement Ratio – 2019-2020 | ||
|---|---|---|
| S No | Insurance Company | Claim Settlement Ratio % |
| 1 | Aditya Birla Sun Life | 97.54% |
| 2 | Aegon | 98.01% |
| 3 | Aviva | 97.53% |
| 4 | Bajaj Allianz | 98.02% |
| 5 | Bharti Axa | 97.35% |
| 6 | Canara HSBC OBC | 98.12% |
| 7 | Edelweiss Tokio | 83.44% |
| 8 | Exide Life | 98.15% |
| 9 | Future Generali | 95.28% |
| 10 | HDFC | 99.07% |
| 11 | ICICI Prudential | 97.84% |
| 12 | IDBI Federal | 96.47% |
| 13 | India First | 96.65% |
| 14 | Kotak Mahindra | 96.38% |
| 15 | LIC | 96.69% |
| 16 | Max Life | 99.22% |
| 17 | PNB Met Life | 97.18% |
| 18 | Pramerica Life | 98.42% |
| 19 | Reliance Nippon | 98.12% |
| 20 | Sahara | 89.45% |
| 21 | SBI Life | 94.52% |
| 22 | Shriram | 91.61% |
| 23 | Star Union | 96.96% |
| 24 | Tata AIA | 99.06% |
Best Life Insurance Company based on the Claim Settlement Ratio (CSR)
Here are the list of Top 10 Best Life Insurance Companies based on Claim Settlement Ratio (CSR) in 2021. If you observe, this time LIC is not figuring this the Top 10 list. This is Top 16th rows.
| Top 10 Claim Settlement Ratios – 2019-2020 | ||
|---|---|---|
| S No | Insurance Company | Claim Settlement Ratio % |
| 1 | Max Life | 99.22% |
| 2 | HDFC | 99.07% |
| 3 | Tata AIA | 99.06% |
| 4 | Pramerica Life | 98.42% |
| 5 | Exide Life | 98.15% |
| 6 | Canara HSBC OBC | 98.12% |
| 7 | Reliance Nippon | 98.12% |
| 8 | Bajaj Allianz | 98.02% |
| 9 | Aegon | 98.01% |
| 10 | ICICI Prudential | 97.84% |
Can my life insurance company reject claims in future?
Yes. They can cite any reason and reject claims in future.
However, as per the recent amendment to Section 45 of the Insurance Act, if your policy has completed 3 years, irrespective of what happens, the life insurance company should not deny the life insurance claims. Hence the life insurance company has only 3 years in hand to reject the policy based on any misrepresentation or misstatement. Once 3 policy tenure is completed, then the life insurance company has to settle the claims and has no right to reject them.
Also Read: LIC Tech Term Vs Max Life Term Plan – Which is better?
Should you opt for high claim settlement ratio insurance companies?
If you are picking a term insurance plan, there are several things to be considered. One of the key parameters is claim settlement ratio. One should note that we cannot do anything if claim settlement ratios are coming down compared to previous years. However, a few companies like HDFC Life, Max Life, Aegon, ICICI Life Insurance and LIC claim settlement ratios are always high.
This does not mean you can stick to such companies only as they charge high premiums too. One can select insurance companies that consistently has > 95% claim settlement ratio. This way you are not sticking to just the top 5 (which might change every year).
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