Claim settlement ratio is one of the important factors that you should consider while deciding on the insurance provider to buy a term life insurance plan. Keeping your best interests in mind, we have put together key facts about claims that can be helpful when you buy a term plan:
1. What is a claim settlement ratio?
Claim settlement ratio (CSR) is the % of claims that an insurance provider settles in a year out of the total claims. It acts as an indicator of their credibility. As a general rule, the higher the ratio, the more reliable the insurer is.
You can easily find the CSR of different companies on the official website of the Insurance Regulatory and Development Authority of India (IRDAI).
2. Why is a claim settlement ratio important?
- It helps assure the financial security of your family
The entire objective of buying life insurance is ensuring financial protection against unforeseen circumstances. However, the purpose will be defeated if the insurer does not honor your claim. On the other hand, if the insurer honors most of the claims, your family is more likely to have a simple, transparent and hassle-free claim process. You can, thus, be rest assured that your loved ones don’t have to go through a tough for time getting the sum assured.
- Indicates the insurer’s reliability
The claim settlement ratio indicates their ability to pay the sum assured to you or your nominee. If your provider has been maintaining a consistently high CSR over a considerable amount of time, they are unlikely to default on their compensation commitment.
3. How is a claim settlement ratio calculated?
A CSR is calculated with the following formula:
Claim Settlement Ratio (CSR) = (Total number of claims settled in a year/ Total number of claims in a year) X 100
For example, Company A settled 9,500 claims out of the 10,000 claims for 2019-2020. Its CSR will, thus, be 95% (9,500/10,000*100).
4. Claim settlement ratio is published every year
Our Claims Settlement Ratio for FY2019-20 is 97.8%*
This is computed basis individual claims settled over total individual claims for the financial year. For details, refer to Public Disclosures in our Website.
5. Claim settlement ratio must be consistent
Over the last decade, we have successfully maintained a solid track record in claims settlement. The Claims Settlement Ratio for all life insurance companies is published in IRDAI's Annual Report. This ratio is based on volume of claims settled and ours is one of the best in the industry. Check out our historical claim settlement ratios below:
|Claims Settlement Ratio||97.8%||98.6%||97.88%||96.68%||96.2%||93.8%||94.10%||96.29%||96.53%||94.61%||90.17%|
*Claim statistics are for FY2019-20 and is computed basis individual claims settled over total individual claims for the financial year. For details, refer to Public Disclosures in our Website. For the other years, you can refer to the Annual Reports of the respective years on IRDAI's website.
6. Claims process must be simple
We have made our claims process really easy. It gets completed in 3 steps:
i. Easy Reporting
ii. Quick Processing
To know more about our claims process, click here.
7. Claim process must be quick
We strive to provide a quick and transparent claims experience.
- Our average turn around time for settling a claim is 2.99 days**
- 67% of claims have been settled within 3 days**
- We have settled 96.43% of claims received within 30 days of intimation~
Check out some of the feedback we received from claimants:
Abhijay & Leena Mehta
TI express my gratitude and sincere thanks for the quick settlement of Death Claim under ICICI Pru policy - of my daughter Ms. Latha Ganesan. The entire process was handled quite smoothly by ICICI Pru staff at CMH Road, Indira Nagar, Bangalore, first by explaining the papers required which were duly submitted. Thereupon, further processing was also handled in a professional manner by seeking necessary clarifications and finally accepting the claim. This has helped in settling the account with ICICI Bank for the Housing Loan taken by my daughter.
Thanks to the entire ICICI Pru team.
I think it is the fastest Claim Settlement seen ever and I dont have any words to say except THANK YOU.
My experience through the claim settlement process has been the ultimate service one can get.
Delivered with highest priority care and sensitivity.
I express my gratitude and sincere thanks for the quick settlement of Death Claim under ICICI Pru policy - of my daughter Ms. Latha Ganesan. The entire process was handled quite smoothly by ICICI Pru staff at CMH Road, Indira Nagar, Bangalore, first by explaining the papers required which were duly submitted. Thereupon, further processing was also handled in a professional manner by seeking necessary clarifications and finally accepting the claim. This has helped in settling the account with ICICI Bank for the Housing Loan taken by my daughter.
Thanks to the entire ICICI Pru team.
8. Claims paying ability rating should be good
As a measure of good governance as well as independent certification of financial strength, our Company has subscribed to ICRA Limited’s surveillance on Claims Paying Ability rating. This rating measures an insurance company’s ability to meet policyholder obligations. Our Company has been rated iAAA since 2009 when it initiated the surveillance with ICRA Limited.
|Rating Agency||Instrument||Rating||Rating Date|
|ICRA||Claims paying ability||iAAA||MAR-18|
|ICRA||Claims paying ability||iAAA||MAR-17|
|ICRA||Claims paying ability||iAAA||MAR-16|
|ICRA||Claims paying ability||iAAA||MAR-15|
|ICRA||Claims paying ability||iAAA||MAR-14|
|ICRA||Claims paying ability||iAAA||MAR-13|
|ICRA||Claims paying ability||iAAA||MAR-12|
|ICRA||Claims paying ability||iAAA||MAR-11|
Note: Ratings for ICICI Prudential Life insurance are subject to regular revisions. Kindly refer to the respective agencies for rating methodology.
Claim Settlement Ratio FAQs
1. What is the claim settlement ratio?
2. How is claim settlement ratio calculated?
3. How long does it take for a life insurance company to pay out a claim?
4. What is the time frame within which the claim has to be reported?
5. What are the documents required for claim settlement?
6. Under what circumstances does the company decline the claim?
A claim is rejected if 'non-disclosure' or 'misstatement' of facts is discovered during an investigation. When a fact that affects the policy issuance decision is not disclosed in the proposal, it is termed as 'non-disclosure'. Similarly, withholding information or providing incorrect information while answering questions in the proposal form^^ is termed as 'misstatement'.
For example, when an applicant suffering from kidney failure does not inform the insurer about the same in the proposal form, it is termed as non-disclosure. Similarly, when an applicant overstates his or her income, then it is called a misstatement.
^^Proposal form is the document in which you provide all the relevant details while applying for an insurance policy.
7. Who is entitled to receive the claim benefit?
The claim benefit can be received by:
- The nominee* or their guardian (in case of a minor nominee), if you are the Life Assured
- The proposer, in case you are not the Life Assured^
- Assignee, in case the policy is assigned
- Life Assured, in case of living benefit claims such as claims under disability, critical illness and major surgery rider.
* Nominee is the person you appoint at the time of purchase for receiving the benefits of your insurance policy in your absence.
^Life Assured is the person for whom the life/health insurance policy has been issued.
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*Claim statistics are for FY2017-18 and is computed basis individual claims settled over total individual claims for the financial year. For details, refer to Public Disclosures in our Website.
**The average TAT is calculated from the last document received to payment disbursal date for non-investigated claims.
~The percentage of claims settled within 30 days is computed as follows: Number of individual claims settled within 30 days (10,816) ÷ Total number of Individual claims settled (11,216) × 100
#As per Financial Statements (Schedule 4- Benefits paid (Gross)) of the company, benefits paid since inception up to March 31, 2019.