• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar

Compare Online Insurance Plans in India - MintWise

Term Insurance, Travel Insurance, Student Travel and Medical Insurance, Health Insurance, Cancer Insurance, Critical Illness Insurance

  • Product Quotes
    • Term Insurance
    • Health Insurance
    • Motor Insurance
    • Student Insurance
    • Critical Illness Insurance
    • Personal Accident Insurance
    • Cancer Insurance
    • Resume Application
  • Blog
  • IRDA Compliance
    • License
    • Privacy Policy
    • Terms of Use
    • Disclaimers
    • User Content Policy
    • All from Legal
  • How to choose a Term Plan
  • Term Insurance

Claim Settlement Ratio for Term Insurance by IRDA : 2015-2016

claim-settlement-ratio-irda-2015-2016
  • Author

    MintWise

  • Date

    February 21, 2017

MintWise has also published Claim Settlement Ratio for Term Insurance by IRDA : 2016-2017 which has the latest data.

IRDA has announced the Claim Settlement Ratio for 2015-2016 in Dec 2016. This is valid as most recent till Dec 2017, when the next year’s data will be published by the Regulator. If you are looking for a term insurance plan, you MUST know the IRDA Claim Settlement Ratio (CSR) before making the decision. At this point, we must tell you that in spite of the fact that overall CSR is NOT the best way to decide on your term insurance plan, you cannot ignore it because it is one of the best available indicators as of today.

Definition / Formula of Claim Settlement Ratio

Claim Settlement Ratio = Total Claims Approved (paid to nominees) divided by Total Claims Received by the Company.

So Claim Settlement Ratio (or IRDA claim ratio) is the total number of death claims approved by an insurance company, divided by the total no. of death claims received by the insurance company. It is generally measured for a period of one financial year. It is measured for all products of the company put together (not term insurance plans alone).

To explain this, if an insurance company received 1000 death claims between Apr 1, 2015 and Mar 31, 2016, out of which it

  • paid 973 claims to the nominees of those dead,
  • rejected 16 claims, and
  • is yet to take a decision on the remaining (1000-973-16=) 11 claims,

then

  • the claim settlement ratio (or claims acceptance ratio or claims ratio) of the insurance company = 973/1000 = 97.3%
  • the claim repudiation ratio (or claims rejection ratio) of the company = 16/1000 = 1.6%
  • the claim pending ratio of the company = 11/1000 = 1.1%

All claims ratios are measured in percentages. And thanks to standardization done by the IRDA, the Insurance Regulator of India, it’s that simple to measure and it is therefore a great idea to use Claim Settlement Ratio for Term Insurance buying. IRDAI publishes this information annually. Claim Settlement Ratio 2015-2016 is not yet announced by IRDAI. The latest one available is published in 2015, for the period 2015-2016. This will be valid till Dec 2016, when the next report will get released by IRDA. Claim Settlement Ratio or Claim Clearance Ratio has a simple formula. Claims Settlement Ratio is defined as the ratio of claims paid to nominees by the insurance company and total claims received from customers. The balance claims are either rejected for impersonation, misrepresentation, fraud, etc. or pending for decision by the life insurance companies.

Now, it’s time to dive into the numbers.

Claim Settlement Ratio 2015-2016 Announced by IRDA

Overall, the claim settlement ratio for the life insurance industry stands at 97%, but a lot of it is because of LIC’s large base with very high CSR. A lot of private life insurance companies are now ‘matching up’ since the last 4-5 years. However, like we mentioned in the disclaimers above, it may not be an equal comparison. Here’s all the information on CSR that you will need. Let us see which are the best insurance companies on claims ratio. The ranking is based on the size of the company (New Business Premium generated) so that you get that perspective as well.

Life Insurance
Company
Annual New
Business Premium
Total Value of
Claims Settled
Average Value
of Claim*
Claim
Settlement
Ratio **
Details
LIC Rs. 2,64,975 crores Rs. 9,690 crores Rs. 1.30 lakhs 98% Details
Max Life Rs. 6,970 crores Rs. 261 crores Rs. 2.90 lakhs 97% Details
Tata AIA Life Rs. 1,731 crores Rs. 87 crores Rs. 2.70 lakhs 97% Details
ICICI Prudential Life Rs. 4,782 crores Rs. 406 crores Rs. 3.80 lakhs 96% Details
Aegon Life Rs. 336 crores Rs. 40 crores Rs. 7.90 lakhs 95% Details
HDFC Life Rs. 7,705 crores Rs. 300 crores Rs. 2.50 lakhs 95% Details
Reliance Life Rs. 3,070 crores Rs. 220 crores Rs. 1.60 lakhs 94% Details
SBI Life Rs. 8,930 crores Rs. 390 crores Rs. 2.60 lakhs 93% Details
Canara HSBC Life Rs. 734 crores Rs. 30 crores Rs. 5.70 lakhs 93% Details
Bajaj Allianz Life Rs. 4,166 crores Rs. 352 crores Rs. 2.10 lakhs 91% Details
Sahara Life Rs. 146 crores Rs. 7 crores Rs. 1.00 lakhs 90% Details
Future Generali Life Rs. 510 crores Rs. 30 crores Rs. 1.90 lakhs 90% Details
Exide Life Rs. 1,835 crores Rs. 52 crores Rs. 1.80 lakhs 89% Details
Kotak Life Rs. 2,674 crores Rs. 94 crores Rs. 3.80 lakhs 89% Details
Birla Sunlife Rs. 2,344 crores Rs. 216 crores Rs. 3.40 lakhs 89% Details
PNB Metlife Rs. 1,905 crores Rs. 125 crores Rs. 4.70 lakhs 85% Details
Edelweiss Tokio Life Rs. 251 crores Rs. 14 crores Rs. 11.80 lakhs 85% Details
IDBI Federal Life Rs. 950 crores Rs. 43 crores Rs. 4.70 lakhs 85% Details
DHFL Pramerica Rs. 858 crores Rs. 14 crores Rs. 3.00 lakhs 84% Details
Aviva Life Rs. 883 crores Rs. 101 crores Rs. 8.10 lakhs 82% Details
Star Union Dai-ichi Life Rs. 887 crores Rs. 33 crores Rs. 2.90 lakhs 81% Details
Bharti Axa Life Rs. 1,043 crores Rs. 50 crores Rs. 5.00 lakhs 80% Details
IndiaFirst Life Rs. 1,425 crores Rs. 41 crores Rs. 3.00 lakhs 72% Details
Shriram Life Rs. 964 crores Rs. 42 crores Rs. 2.80 lakhs 60% Details

Claims Settlement Ratio Consistency Trend Teaser

What should you look for in Comparison of Claims Ratios?

Based on the above data on Claims Ratio published in 2015, this is how you should interpret it.

  • Claim Settlement Ratio higher than 85% is good. Of course, very high CSR (more than 90%) is welcome if the life insurance company is also offering you a great value product. e.g. LIC, Max Life, Tata AIA Life, ICICI Prulife, Aegon Life, HDFC Life, Reliance Life, SBI Life, Canara HSBC Life, Bajaj Allianz Life, Sahara Life and Future Generali Life.
  • Notice the variance in average value of claim paid. Higher the sales of term insurance (as % of overall portfolio), higher is the average value of claim paid. Also, lower is the CSR if the companies are newer.

Some Disclaimers on Claims Ratio

While claim settlement ratio is recommended as worthy of consideration at the time of buying a term insurance plan, the ratio is only indicative and not 100% perfect for this purpose. The reasons for which we are saying this, are as follows.

  1. The ratio is for all life insurance products put together and not just term insurance plans. So claim settlement ratio works in favor of life insurance companies with large non-term product customer base since such customers had bought a life insurance policy mainly with the aim of getting returns rather than as a protection tool in case of death.
  2. Frauds committed by customers cannot be blamed on the life insurance company. In such cases, it is only correct on the company’s part to deny the claim. Over time, when you eliminate fraud, you settle claims for only genuine cases and this can bring down the premiums for customers. So chasing fraudulent claims is indeed in the interest of good customers, even if it is at the cost of claim settlement ratio going down.
  3. Most of the claim denials happen in the first 2 years after issuance of the insurance policy. In life insurance industry parlance, they are called ‘early claims’. Newer companies will have many more early claims as a % compared to older companies. Claim settlement ratio of newer life insurance companies can come down for this reason.
  4. Some insurance companies which aggressively sell term insurance plans investigate all the suspicious and most of the large value claims before payout. So they may end up discovering more fraud cases, rejecting them (obviously) but deteriorating their claims ratio. We need to keep this perspective in mind when we look at some of the smaller companies with lower claim settlement ratio.

Having said this, life insurance companies who have managed a high claim settlement ratio in 2015 have indeed done a fabulous job – no denying that.

Final Words on Claims Settlement Ratio when buying Term Insurance

In conclusion, you should definitely use Claim Settlement Ratio when buying a term insurance plan. In addition to that, if you buy a term plan online by filling the application form yourself, and if you declare everything honestly on the form as well as during the medical examination to the doctor, it will make sure that your chances of claim approval are very high indeed.

If you are looking to buy a Term Insurance Plan with a guarantee of getting the claim if required, these tips, can help.

[term_ins_hook_cta2]

Related Posts

  • Claim Settlement Ratio Term Insurance India 2012-2013
    Claim Settlement Ratio for Term Insurance by IRDA : 2014-2015
  • Best Term Insurance Plan
    The Best Term Plans of 2019
  • claim-settlement-ratio-irda-2015-2016
    Claim Settlement Ratio for Term Insurance by IRDA : 2017-2018

14 thoughts on “Claim Settlement Ratio for Term Insurance by IRDA : 2015-2016”

  1. MintWise says:
    June 15, 2017 at 1:31 PM

    It means that the total VALUE of the claims that were settled is 69.14% of the total VALUE of claims made.

    Claims Ratio, in general, is expressed as a % of the customers whose claims have been settled, and not on value terms.

  2. Renita says:
    June 15, 2017 at 11:06 AM

    Hi, I had a look at the the IRDA annual report for year 2015-2016 to check the death claims for the respective insurance companies.

    I am trying to understand the ‘Benefit amount’ that is listed along with ‘No. of policies’ under ‘claims paid’ column. In case of HDFC,it is 11811 policies (95.02%) with 300.19 Cr (69.14%), does this mean that HDFC has paid on 69.14% of the claim amount in am average?

  3. MintWise says:
    May 25, 2017 at 8:41 PM

    Hi Sanjay, thanks for your query.

    There are more dependencies that just age and gender. Such as smoking habit, the duration you are looking for, claims ratio, solvency margin, the riders you would need to add to make the plan comprehensive and of course the brand. All this is available at multiple price points as well. The best way to find out is to compare brands and narrow down your choices.

    To do that, just click on this link below and proceed.

    https://www.mintwise.com/term-insurance-compare

  4. SANJAY GOYAL says:
    May 25, 2017 at 7:52 PM

    I am looking for a term plan and my age is 25. Kindly suggest me a best Term Plan

  5. MintWise says:
    May 24, 2017 at 6:12 PM

    Perfect. Go ahead, Vamsee.

  6. Vamsee Krishna says:
    May 24, 2017 at 3:13 PM

    Thanks a lot, Sir! I also looked at LIC, HDFC, SBI, etc, though CSR is high, premium is also high. As per latest disclosed data, 92% is CSR for Bharathi AXA for 3 quarters for 2016-2017. I think with CI & ADB raiders, I can go with Bharathi AXA.

    Your inputs are valuable!

  7. MintWise says:
    May 20, 2017 at 10:05 AM

    Hi Vamsee, Claims Settlement Ratio published by IRDAI includes only death claims, not claims for Critical Illness rider. So the CSR of 80% is for death claims alone.

    However, in our view a claim getting passed depends entirely on the buyer – if you declare everything truthfully and comprehensively, we do not see a reason why any company would deny the claim. If you are happy with the features of the plan you mentioned, please go ahead and buy it. If you would like to see further choice click on the link below and compare premiums to buy the most suited plan.

    https://www.mintwise.com/term-insurance-compare

    All the best, Vamsee.

  8. Vamsee Krishna says:
    May 19, 2017 at 10:38 PM

    I am looking for Bharathi AXA Term insurance plan. First premium is low, good critical illness cover, death cover will still continue in case of CI, Accidental cover is there. More importantly coverage is there till 85yrs, which no one gives(without CI). But settlement ratio is low approximately 80%. Should i still choose this? It may be low settlement ratio as more people falsely tried to get money for CI at early stage? Your inputs needed sir.
    Thanks!

  9. iRadius Group says:
    April 20, 2017 at 4:14 PM

    thank you

  10. MintWise says:
    March 29, 2017 at 9:37 AM

    CSR is in fact the last thing to be checked. Firstly, Raviprasad, get your requirements right – what kind of term plan, whether you need riders (add-ons), etc. and what should be the level of cover and till when. Once you do that go with an insurer that offers that at a reasonable price and has a 80+ claims ratio. Choose a brand you are comfortable with – you are not likely to go wrong. Any person recommending a specific brand wouldn’t be doing so without reason.

  11. MintWise says:
    March 29, 2017 at 9:34 AM

    Unfortunately, limited details are available in public domain at a reason level for claims. Perhaps that should not be published either. But one can guesstimate that this could be because of genuine reasons. It is not that insurers are keen to deny any genuine claim. They are keen to only deny genuine fraudulent cases, and that happens for the benefit of the good customers.

    CSR being high or low is not important beyond a point. All you need to ensure is that your individual application is transparent and everything is indicated clearly. Getting medicals done is a plus, surely. As long as that is the case, no company will reject your claim in case there is one.

    Hope you get the picture, Shailesh.

  12. Shailesh Soni says:
    March 28, 2017 at 6:08 PM

    Any idea why claim settlement ratio for AVIVA is less, what could be the rejection reason, where can we get such information

  13. MintWise Admin says:
    February 22, 2017 at 12:48 PM

    Dipak, we do not recommend brands per se. We suggest that you do not think of a brand to start with. Get your requirements clear, what are you covering for, for how many years, what kind of claim amount is best, etc. and then choose a brand you are comfortable with. Do check the Claim Settlement Ratio before you finalize your term insurance plan.

  14. Dipak says:
    February 21, 2017 at 2:06 PM

    Hi. Thanks for claims information. What is the best combination of csr and premium that is recommended by you for term insurance plan?

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Primary Sidebar

What are you looking for?

SAVE!!!
Term Insurance
of   1 Crore - 55% Off!
@ just Rs. 5,728 / year*
DATE OF BIRTH
SMOKING / TOBACCO
Yes No
GENDER
Male Female
* for a healthy 25-yr old Non-smoker Male for 25 years.

Recent Posts

  • claim-settlement-ratio-irda-2019-2020Claim Settlement Ratio for Term Insurance by IRDA : 2020-2021
  • Family ProtectionThe Best Term Insurance Plans of 2022
  • claim-settlement-ratio-irda-2019-2020Claim Settlement Ratio for Term Insurance by IRDA : 2019-2020
  • Group Health InsuranceGroup Health Insurance (GHI) made Mandatory for Employers
  • important of term insuranceThe Importance of Term Insurance

Copyright © 2023 · Genesis Sample on Genesis Framework · WordPress · Log in

1800 2121 344

Mon - Sat: 10 AM TO 7 PM

info.mintwise@platinumone.co.in

Email Us

Live chat

Mon - Sat: 10 AM TO 7 PM

+91 86526 45424

WhatsApp 24 x 7

Insurance is the subject matter of the solicitation.

Product and related information like Claim Settlement ratios displayed on www.mintwise.com is based on the information received from the Insurers and/or as published by the IRDAI, the Insurance Regulator.

Corporate Office : PlatinumOne Insurance Broking Private Limited, Unit No. 907, 9th Floor Lodha Supremus II, Plot No. F-4 & F-4/1, Rd No.22, Wagle Estate, Thane (West), Thane 400 604, Maharashtra, India.