There are multiple factors to help you choose an insurance policy among the millions in the market. Important ones are claim settlement, premium, type of policy, returns, tenure and so on. While most of us choose based on returns and premium amount, most important factors that must be looked into is claim settlement.
What is Claim Settlement Ratio?
Claim settlement means the total number of claims settled. Claim settlement ratio refers to the number of claims settled against the claims received by the insurer. For example, if an insurance company settles 99 claims out of the 100 claims it has received, it has a claim settlement ratio of 99%.
(Also see: Claim settlement for online term settlement)
What is the ideal ratio?
Though there is no such thing as ideal claim settlement ratio (CSR), experts recommend at least 90% as a standard. Higher the ratio, better it is for the insured as it will increase the probability of his family receiving the claim amount.
What are the top 5 life insurance companies as per CSR?
1) Life Insurance Corporation (LIC)
As expected, LIC tops the claim settlement chart with CSR of 97.7% in the previous financial year as per IRDA data. Apart from this, its claim rejection ratio (number of claims rejected/number of claims received) i.e. CRR stood at 1% and claim pending ratio (number of claims pending/number of claims received) or CPR was 1.04%.
2) ICICI Prudential Life
Among the private insurers, ICICI Pru Life insurance company tops the list with CSR of 96.3%. Its CRR was 4%, which is comparatively higher than the counterparts. However, CPR was a lot better at 0.08%.
(Also see: Claims rejected – Reasons behind it)
3) HDFC Life
HDFC Life insurance company has achieved CSR of 95.8%. CRR of the company stood at 3% and CPR was 1.61%. Though CSR is decent enough, the other two ratios are a slight disappointed for the company. It means that 4.6% of claims were either rejected or were pending for approval.
4) SBI Life
CSR of SBI Life insurance company was 94.4%. CRR and CPR were reported as 4% and 1.89% respectively. These two ratios combine to be almost 6%, which is way too high.
5) Max Life
Max Life insurance company had CSR of 94.3%. The CRR and CPR were 6% and 0.08% respectively. These ratios are not ideal as 6% of the claims applied with the company had been rejected due to various reasons.
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