Last Updated on May 24, 2022 by Nikitha
In India, there are 24 life insurance companies operating in the insurance industry. Out of these, the Life Insurance Corporation of India (LIC) is owned by the Government, while the other companies are privately held insurance providers.
All these companies issue a range of life insurance policies to help you avail of 360-degree protection. You can opt for a term insurance policy for financial security, endowment or money back plans for creating a guaranteed corpus, ULIPs for investments, child plans for securing your child’s future, or pension plans for retirement planning.
When buying any life insurance policy, it is recommended to compare the plans offered by all these insurance companies so that you find the best coverage at the best deal. Besides the coverage and the premium, the claim settlement ratio of the insurance company is another important parameter that should be judged.
Do you know why? Let’s find out.
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What is the claim settlement ratio?
Called CSR in short, the claim settlement ratio of a life insurance company is a numerical figure which shows the percentage of claims paid by the insurer vis-à-vis the total number of claims raised on it in a financial year. It is calculated using the following formula –
CSR = (number of claims paid/ total number of claims raised) * 100
For instance, if, out of 100 claims raised, an insurance company settles 98 claims, the claim settlement ratio would be 98%.
Why is CSR important?
The claim settlement ratio is an important parameter when judging an insurance company because it shows the claim paying capacity of the company. A high ratio is favorable as it increases the trust of the insurer since most of its claims have been successfully paid.
So, when comparing insurance companies, comparing their CSR and choosing a company with a high CSR is better.
Top 10 term life insurance companies with the highest CSR
The Insurance Regulatory and Development Authority of India (IRDAI) calculates and publishes the CSR of life insurance companies every year in its annual reports. Currently, IRDAI has published its annual reports for the FY 2020-2021, wherein the CSR of all the life insurers have been published.
According to IRDAI’s annual reports, here are the top 10 life insurers of India with the highest claim settlement ratios –
|Serial number||Name of the company||Claim Settlement Ratio (CSR)|
|1||Max Life Insurance Company Limited||99.35%|
|2||Aegon Life Insurance Company Limited||99.25%|
|3||Bharti AXA Life Insurance Company Limited||99.05%|
|4||Life Insurance Corporation of India||98.62%|
|5||Pramerica Life Insurance Company Limited||98.61%|
|6||Exide Life Insurance Company Limited||98.54%|
|7||Kotak Mahindra Life Insurance Company Limited||98.5%|
|8||Reliance Nippon Life Insurance Company Limited||98.49%|
|9||Bajaj Allianz Life Insurance Company Limited||98.48%|
|10||PNB MetLife India Insurance Company Limited||98.17%|
Here’s a brief look into all these insurers –
- Max Life Insurance Company Limited
Having the highest CSR, Max Life tops the chart. The company offers a variety of life insurance solutions and enjoys solvency of 202%. For the FY 2020-2021, the company’s Assets Under Management (AUM) stood at more than Rs. 90,000 cr.
- Aegon Life Insurance Company Limited
Aegon is a leading life insurance provider in India with some of the most comprehensive and innovative life insurance plans. Aegon is credited to have launched the first online term plan paving the way for other insurers. The company has a simple claim process that has contributed to its high CSR, ranking it second.
- Bharti AXA Life Insurance Company Limited
Launched in 2006, Bharti AXA is a joint venture between two leading companies – the Bharti Group from India and the AXA Group from France. The company won the award for the Best Insurance Company for Claim Management in the Life by Insurance Alerts Awards 2019.
- Life Insurance Corporation of India
The oldest life insurer in India, LIC, enjoys the trust of crores of its customers. It has the largest market share in the life insurance segment and offers easy and convenient claim settlements for its customers. The company is all geared for an IPO launch soon, which is touted to be the largest IPO in Indian history.
- Pramerica Life Insurance Company Limited
A joint venture between DHFL Investments Limited and Prudential International Insurance Holdings Limited, Pramerica is a relatively new insurer that started its business in September 2008. However, within a short span, the company has reached the top 5 rank in claim settlement within a short span due to its simple claim process.
- Exide Life Insurance Company Limited
A wholly-owned subsidiary of HDFC Life Insurance, Exide Life is an ISO 9001:2015 certified insurer for its customer service processes. The company offers round-the-clock assistance in claim settlement, ensuring speedy service to its customers.
- Kotak Mahindra Life Insurance Company Limited
Insuring more than 32 mn lives (as of 31 August 2021), Kotak Mahindra is another leading insurer in India. The company offers online and offline claim assistance for fast settlements so that your family gets the funds when they need them the most.
- Reliance Nippon Life Insurance Company Limited
Reliance Nippon is a joint venture between Reliance Capital and Nippon Life. In the Insurance Asia Awards, the company won the Claims Initiative of the Year Award in 2021. Moreover, the insurer offers a 10-day claim service guarantee to fast-track its claims.
- Bajaj Allianz Life Insurance Company Limited
Bajaj Allianz enjoys AAA(IS): Stable rating given by CARE, showing that the company has a stable financial outlook. It boasts of a 1-day claim approval wherein 95% of the non-investigative claims of FY 2020-2021 were approved within a day. This is why the company has a high claim settlement ratio and ranks amongst the top 10.
- PNB MetLife India Insurance Company Limited
With more than 206 mn. customers, PNB MetLife, is also a leading insurance company in India. Besides a 98.17% CSR for individual insurance policies, the company also boasts of a 99.65% CSR for its group insurance policies, showing that it endeavors to settle most of its claims.
The bottom line
The next time you are in the market for a life insurance policy, compare the insurer’s claim settlement ratio for an easier claim experience. You can choose from the aforementioned insurers that have the highest CSR for FY 2020-2021. So, assess your coverage needs and then compare the available insurance plans based on the coverage offered, the premium charged, and the claim settlement ratio of the insurer.
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