Life Insurance Companies Claim Settlement Ratio

Life insurance policy is a two way contract between the insurance company and the insured based on the principle of utmost good faith. The insured (whose risk of life is covered by the insurance company) promises to pay the premium as per the policy contract terms and conditions. On the other hand, the insurance company promises to pay the claim which arises due to either death of the insured during the policy term or on maturity of the policy contract (whichever is earlier).

Settlement of death claim by the insurance company is all the more important for the dependents of the insured as it compensate the family of the deceased financially when it is needed the most. This is the crucial and fundamental reason why anyone would buy a life insurance policy. To ensure the financial protection for his/her dependents in case of one’s untimely demise is the crux for buying a life insurance policy.

How sure are you that the insurance company is inclined to pay the death claim before you decide to buy a life insurance policy? The inclination or likelihood of an insurance company towards the payment of death claim can be ascertained with the help of “CLAIM SETTLEMENT RATIO” (CSR) of the insurance company.

NOTE: Latest IRDAI Annual Report of Claim Settlement Ratio for FY 2018-19

Table Content

  • What is Claim Settlement Ratio (CSR)?
  • Past 5 Years Claims Settlement Ratio for the Life Insurers
  • How Claim Settlement Ratio (CSR) is measured?
  • Why is It Important to Analyze CSR?
  • Past CSR Trends Important to Scrutinize an Insurance Company –Consistency is the Key!
  • Why CSR is all the more Important to be Considered if You are buying a Term Insurance Plan:
  • Higher the Ratio, Better is the Insurance Company
  • Important Facts which could Impact the CSR
  • Related posts:

What is Claim Settlement Ratio (CSR)?

The claim settlement ratio is the indicator of the number of death claims settled by an insurance company over the number of total claims reported in a given financial year. The number of death claims settled and reported are for all types of life insurance policies (be it a term plan, saving plan, investment plan, etc.) sold by the insurer collectively.

Claim settlement ratio is an important pointer that cannot be skipped as it suggests the likelihood and efficiency of settlement of claims by an Insurance Company. It is a vital parameter for the customer to analyze the Claim settlement ratio before finalizing the life insurance plan along with other important factors like premium, plan benefits, key features, etc. The claim settlement ratio is calculated for every financial year for all the life insurance companies and is published in the IRDAI’s Annual Report which can be seen on the regulator’s website.

Past 5 Years Claims Settlement Ratio for the Life Insurers

S. No Insurer Name CSR%

2015-16

CSR%

2016-17

CSR%

2017-18

CSR%

2018-19

CSR%

2019-20

01 Max Life 96.95 97.81 98.26 99.22 99.22
02 HDFC Life 95.02 97.62 97.80 99.04 99.07
03 Tata AIA Life 96.8 96.01 98.00 99.07 99.06
04 Pramerica Life 83.64 90.87 96.62 96.80 98.42
05 Exide Life 89.36 96.40 96.81 97.03 98.15
06 Reliance Nippon 93.82 94.53 95.17 97.71 98.12
07 Bajaj Life 91.3 91.67 92.04 95.01 98.02
08 Aegon Life 95.31 97.11 95.67 98.01 98.01
09 ICICI Prudential 96.6 96.68 97.88 98.58 97.84
10 Aditya Birla Sunlife 88.45 94.69 96.38 97.15 97.54
11 Aviva Life 81.97 90.6 94.45 96.06 97.53
12 Bharti AXA 80.02 92.37 96.85 97.28 97.35
13 Canara HSBC 92.99 94.95 95.22 94.04 97.35
14 PNB Metlife 85.36 87.14 91.12 96.21 97.18
15 Star Union 80.73 84.05 92.26 96.74 96.96
16 LIC 98.33 98.31 98.04 97.79 96.69
17 India First 71.87 82.65 89.83 92.82 96.65
18 IDBI Fedral 84.70 90.33 91.99 95.79 96.47
19 Kotak Mahindra Life 89.09 91.24 93.72 97.40 96.38
20 Future Generali 90.26 89.53 93.11 95.16 95.28
21 SBI Life 93.39 96.69 96.76 95.03 94.52
22 Shriram Life 60.24 63.53 80.23 85.30 91.61
23 Sahara India 90.3 90.21 82.74 90.16 89.45
24 Edelweiss Tokio 85.11 93.29 95.24 95.82 83.44