One of the primary concerns when purchasing an insurance policy is the insurer’s ability to settle claims. In India, the insurance regulator mandates the public disclosure of the claims settlement ratio, offering a reliable measure for policyholders. This ratio aids in determining whether a life insurer and their insurance policies align with your needs.
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In simple terms, the claims settlement ratio is a calculation metric that gauges the proportion of claims settled by an insurer against the total number of claims received. This ratio serves, as a crucial indicator of the insurer’s dedication to fulfilling insurance claims. A higher ratio assures the insured person's family, indicating a greater likelihood of the company settling claims efficiently in the event of the insured individual’s unfortunate demise.
Here’s the claim settlement ratio of top life insurance companies, as it is one of the vital factors a policyholder considers while purchasing a policy.
In a recent comparison, Max Life has outperformed others, leading the chart with a claim settlement ratio of 98.61% in Q3FY2024. Close on Max Life's heel is ICICI Prudential Life, with a competitive claim settlement ratio of 98.52% compared with 98.14% in Q2FY2024. Closely following is TATA AIA, with a claim settlement ratio of 95.69% for Q3FY24 compared with 90.55% in Q2FY24 and 77.28% in Q1FY2024.
The largest public sector company, the Life Insurance Corporation (LIC), holds a claim settlement ratio of 93.91% compared with 93.7% in Q2 and Q1 of FY 2024. HDFC Life is another key player in the private sector that has secured fourth place with a claim settlement ratio of 96.62%. Similarly, Bajaj Allianz Life, SBI Life, and Kotak Life have sealed their positions with 96.29%, 95.66% and 92.61% respectively.
Smooth and efficient claim settlement processes are paramount in the life insurance sector, enhancing the trustworthiness of insurance providers. When selecting your life insurer, examine the consistency of their claim settlement ratio over time. Better steer clear of companies with erratic fluctuations, as those with steady ratios are more reliable in ensuring the prompt settlement of your claims.
Rapid settlement not only helps in increasing trust but also boosts loyalty. To gain a comprehensive understanding of an insurance company's ability to settle claims, policyholders should thoroughly review and compare the claim settlement ratio before deciding to purchase an insurance policy.
