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Life Insurance Claim Settlement Ratio 2022 as per IRDA

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Life Insurance Claim Settlement Ratio 2022 as per IRDA

IRDA has published an annual report for FY2020-21 now. The IRDA annual report contains life insurance claim settlement ratio and several other ratios. These ratios would help us to know the best life insurance companies in India. One should always consider a life insurance plan that has a high claim settlement ratio of over 95% consistently. In this article we would provide IRDA claim settlement ratio of Life Insurance Companies for FY2020-21 (applicable now in 2022).

What is Claim Settlement Ratio?

Claim Settlement Ratio (CSR) is the ratio of total death claims paid over the total death claims received by the life insurance company.

If the company has received 100 death claims and processed 85 death claims, the CSR is 85% (85/100).

Higher claim settlement ratios mean, the company is approving the majority of death claims. Lower the claim settlement ratio means, company is rejecting claims on higher side.

While there are several factors, claims ratio is one of the key parameters in picking up a right insurance plan.

What does the latest IRDA report say about life insurance companies claim ratio?

Here are some key highlights of IRDA report.

1) LIC is the largest life insurance company. Its claim settlement ratio is increased from 96.69% in FY19-20 to 98.62% in FY20-21.

2) Private insurance companies claim settlement ratio has marginally reduced from 97.18% (FY19-20) to 97.02% (FY20-21).

3) Overall industry claim settlement ratio has increased from 96.76% (FY19-20) to 98.39% (FY20-21). It is really good news that rejections are reducing year on year.

4) Due to stiff competition from private insurance companies, LIC market share has reduced from 66.22% of last year to 66.14% of this year on the total premiums collected.

Which is the Best Life Insurance Company based on Claim Settlement Ratio?

Based on CSR of FY20-21, below are the top life insurance companies in India.

S No Life Insurance Company Claim Settlement Ratio FY2019-20 Claim Settlement Ratio FY2020-21
1 Max Life Insurance 99.22 99.35
2 Aegon Life Insurance 98.01 99.25
3 Bharti Axa Life Insurance 97.35 99.05
4 LIC 96.69 98.62
5 Pramerica Life 98.42 98.61
6 Exide Life 98.15 98.54
7 Kotak Life Insurance 96.38 98.5
8 Reliance Nippon Life 98.12 98.49
9 Bajaj Allianz Life 98.02 98.48
10 PNB Metlife Life 97.18 98.17
11 Aditya Birla Sun Life Insurance 97.54 98.04
12 Tata AIA Life 99.06 98.02
13 Aviva Life Insurance 97.53 98.01
14 HDFC Life Insurance 99.07 98.01
15 ICICI Prudential Life 97.84 97.90

Which are the consistent Life Insurance Companies based on claim settlement ratio?

Claims Ratio would keep changing every year. However, one should pick-up life insurance plan from an insurance company that has consistent claim settlement ratio of over 95%.  This way in future the claim request from the family would be more or less honored. Below are the insurance companies that would fall under this category.

1) Max Life Insurance Company

2) Tata AIA Life Insurance

3) HDFC Life Insurance

4) ICICI Prudential Life Insurance

5) Aegon Life Insurance Company

Suresh KP

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