IRDA Death Claim Settlement Ratio 2019-20 Analysis. Find the best and worst life insurance companies in India. The Insurance Regulatory and Development Authority of India (IRDA) has published it. annual report For the year 2019-20 On 10 February 2021. Based on this report, read a detailed analysis of the claims settlement performance of various companies and understand the best life insurance companies in India. This analysis can help you make informed decisions in your next life insurance product purchase.
Why is the death claim settlement ratio important?
Disposing of Death Claims judiciously and expeditiously is the prime duty of any life insurance company. The claims settlement performance of the insurance company can give a clear indication of the credibility of the company.
An insurer’s death claim settlement ratio is the median percentage ratio Settled claims And Claims received over a period of time. In other words, if the life insurer has a claim settlement ratio of 80%, it means that the insurer pays 80 out of every 100 claims that occur during the period. Claim settlement ratio can be calculated on the basis of Number of policies or Profit amount Settled. Analysis of both these parameters is necessary to get a proper understanding of the performance of the claim settlement of the insurance company.
Different Types of Claims – Insurance Companies
Insurance companies settle various types of claims and a death claim is one of them. Different types of claims decided by insurance companies include maturity, surrender / withdrawal death claims etc. Let us look at the ratio of different claims decided by insurance companies in India.
Of the total claims of 2,52,761 crore settled by LIC of India, only 7% claim death and 60% claim settlement as maturity. Whereas in the private sector, 13% were death claims and 53% of the total claims were in the form of surrender or withdrawal.
IRDA – Death Claim Settlement Ratio (Life Insurance) 2019-20
Death claim settlement ratio As well as Claim rejection / repatriation ratio Information about Indian life insurance companies is given in the table below. The claim rejection ratio is the rate of claim that was rejected or revoked in the period given by the company. Along with the number of policies, the benefit amount has also been provided.
I have provided color coding to the table so that you can understand how well each company has performed in terms of claim settlement. For moderate performance, red is the worst and yellow is the best, while green is the best.
Claim Settlement vs Claim Rejection / Rejection Ratio
The ratio between claim rejection ratio is Number / amount of claims rejected by the company as a whole, in comparison with Total number of claims / amount.
One point you must remember is that unresolved claims include ‘Claims revoked‘And’Pending claims‘. Pending claims can also be resolved later. Therefore the claim settlement ratio alone cannot give a clear idea of the performance of the company. On the other hand, the claim cancellation ratio can give a better picture of a company’s claim performance.
The best three companies based on claim redemption ratio are…
|Post||Insurance company||Claim revoked (number of policies)||Reimbursement claimed (Benefit amount)|
|3||LIC of India||0.81%||1.50%|
HDFC topped the lowest claim withdrawal ratio based on the number of policies but 3.62% of claims were returned when considering the benefit amount. This means that claims performance in high-performance policies was not so good. Aviva and India’s only public sector company, LIC, have done well in both cases.
That was the worst performance Edelweiss tokyo Those who pay about one third of the claims in terms of profit amount.
Aviva tops the chart with the lowest claim rejection ratio of 1.16%, followed by LIC of India with 1.50% and Bharti AXA with 2.46%.
Performance of LIC of India – One and Only Public Sector Company
LIC of India has a proven track record of best claim settlement performance as compared to other insurance companies in India. The performance was exceptional this year as well.
The above information-gram shows how India’s LIC claim can be changed in the last four years. LIC had steadily improved the claims compensation ratio from 1.83% in 2016-17 to 1.43% in 2018-19. But in the last year (2019-20) this rate has come down to 1.5%.
Death Claim Rapidation Lic Vs Private Company
Overall considering the claim rejection ratio of private sector companies, the average claim rejection ratio for the year 2019-20 was 6.11%. While the rejection ratio of LIC was just 1.5%. Many private sector insurance companies performed well this year but the companies liked Edelweiss tokyo Screwed up the ratio.
Time to settle death claims – a comparison
The time taken to settle death claims is also an important parameter that has to be considered in view of the performance of insurance companies. In the absence of the family breadwinner as a result of the unfortunate event, the family’s financial difficulties may be reduced to a great extent by the earlier settlement of the claim. The time taken to settle the pending death claims is provided in the chart above. We can see that many companies can settle all death claims within 3 months.
The poor performance of Kotak Mahindra and India First can also be understood from the chart.
Read more: – LIC Bonus Rates 2020 – Everything you need to know
Anish LJ is a ‘Financial Planner’ and a member of Chartered Insurance Institute (CII), London and Insurance Institute of India. He is also a finance, insurance and software consultant. He fully follows the development of finance, insurance and other related sectors.
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