Claim Settlement Ratio In Life Insurance Companies

Submitted to:Dr. Sarang Narula

Submitted by:Arshdeep Singh6805

A protection against the loss of income that would result if the insured passed away. The named beneficiary receives the proceeds and is thereby safeguarded from the financial impact of the death of the insured.

The goal of life insurance is to provide a measure of financial security for your family after you die. So, before purchasing a life insurance policy, you should consider your financial situation and the standard of living you want to maintain for your dependents or survivors.

Cheaper: Term life insurance is generally cheaper than other forms of insurance, thus allowing you to get the protection you need at a price you can afford. This is because of the simplicity of coverage and the possibility of the death benefit not being paid out.

Flexibility of period: You can get term life insurance protection for a period of time of your choosing. Most life insurance companies offer term life insurance coverage for a period of time ranging from 1 year to 30 years.

Multiple coverage options: Though term life insurance is thought of as the simplest of life insurance policies, it still offers many different options in order to better suit the needs of customers.

Claims Ratio (or claims settlement ratio) is the total number of claims approved by an

insurance company, divided by the total no. of claims received by the insurance company.

the overall quality of customer portfolio of the insurance company and

also indicates the chances that your claim will be settled.

Higher the claims ratio, better will be your comfort level on claim settlement when applying for a term insurance plan.

INSURER CSRFor 11-12

CSR For 10-11

CSR For 09-10

Policy Name Premium

LIC 97.42 97.03 96.54 Amulya Jeevan 15169

ICICI Prudential 96.53 94.61 90.17 I Care 7303

HDFC Life 96.17 95.41 91.14 Click 2 Protect 6067

SBI Life 95.48 82.24 83.27 Smart Shield 8539

Kotak Life 92.1 89.3 86.97 E Preferred Term

5843

Birla Sunlife 90.94 94.66 89.09 Protector Plus 8202

Bajaj Allianz 90.61 88.69 88.19 I Secure 6505

Max Life 89.84 77.96 65.51 PlatinumProtect

10281

Aviva 89.55 84.15 87.11 I Life 4707

ING Vysya 88.82 90.49 89.3

Bharti AXA 87.7 87.17 77.8 E Protect 4607

Star Union 86.16 80.69 58.33

Insurer CSR For 11-12

CSR For 10-11

CSR For 09-10

Policy Name

Premium

Reliance Life

84.58 81.36 89.07

TATA AIA 83.94 81.93 78.17

India First 82.23 82.01 53.85

Metlife 81.37 85.43 82.54

CanaraHSBC

80.58 71.02 38.71

Sahara 77.97 53.23 63.06

Future Generali

68.06 50.52 38.85

IDBI Federal 67.46 64.92 49.52

AegonReligare

66.06 52.31 48 I Term 4607

Shriram 64.93 55.69 39.54

Continued….

ICICI Prudential, HDFC Life, SBI Life, Kotak Life and Birla SunlifeThese 5 companies offer a good combination of higher claim settlement ratio with lower premiums. There is less to differentiate at the CSR level and the premium level, but the features of the product / plan offered can be a key differentiator.

Public sector Life Insurance Corporation of India (LIC) has continued to outperform its private peers when it comes to claim settlement. According to the IRDA annual report FY 2011-2012, the claim settlement ratio of LIC for individual death claims stood at 97.42 per cent during FY 2011-12, slightly better than 97.03 per cent during the previous year. Following LIC was the largest private life insurance company ICICI Prudential Life Insurance with a claim settlement ratio of 96.53 per cent, HDFC Life 96.17 per cent, SBI Life at 95 per cent and Kotak Life Insurance at 92 per cent.

In case of Death Claims

In case of Maturity Claims

The death claim amount is payable in both conditions, when policy’s premiums is paid up-to-date and where the death occurs within the days of grace.

Amount is payable at the end of the policy period when it is Endowment type of Policies, At least two months before the due date of payment the Branch which provide services to the policy intimate the policyholder by sending a letter informing the date on which the policy amount is payable. Discharged form duly filled is requested in return from the policyholder along with the all policy document. After receiving documents postdated cheque is sent by post so as to reach the policyholder before the due date.

The intense competition brought about by deregulation has encouraged the industry to innovate in all areas; from underwriting, marketing, policy holder servicing to record-keeping

Aggressive marketing strategies by private sector insurers will buy consumer awareness of risk and expand the markets for products

Competition in a deregulated environment will allow market forces to set premiums that are appropriate for exposures and push insurers to differentiate their products and services

Innovations in distribution and improvements in market penetration will follow as public and private insurers compete to market their products

Allowing insurers to issue their own policy wordings and set their own rates will enable underwriters to tailor products to meet client needs

The existence of stringent licensing requirements ensure that only adequately capitalized and professionally managed companies are eligible to carry out insurance and reinsurance

The Insurance Regulatory Development Authority of India’s (IRDA) emphasis on quarterly reporting/monitoring of insurer solvency will enhance capital adequacy and transparency

Licensed brokers are very much part of the intermediary structure and only those with adequate capital, professional experience and expertise will be licensed by IRDA