Securing the financial future of our loved ones is a responsibility that resonates with us all. As the insurance landscape flourishes, it’s crucial to shine a spotlight on a key determinant of an insurer’s trustworthiness – the claim settlement ratio. While many factors influence the choice of a life insurance policy, the claim settlement ratio often remains overlooked despite its profound significance.
Let’s have a look at the most recent claim settlement ratio of the life insurance company for Q1 FY2023.
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The chart clearly highlights that ICICI Prudential Life Insurance stands at the top of the chart by settling 97.9% of the claims received and providing the best customer service. ICICI Prudential Life Insurance has always kept the claim settlement ratio as one of the most important aspects considering that customers trust them with their hard-earned money. ICICI Pru is followed by SBI Life with a 95.8% claim settlement ratio, HDFC Life with a 96.7% claim settlement ratio
An interesting fact, Under their ‘Claim for sure initiative’ death claims will be settled in 1 day, provided some terms and conditions are met, the company claims. With the ‘Claim For Sure’ service initiative, the company aims to reduce the financial distress caused to families due to this loss.
How is it calculated?
A claim settlement ratio highlights the proportion of insurance claims that an insurer successfully addresses in comparison to the total claims lodged by policyholders or their beneficiaries. This ratio is computed by dividing the total count of settled insurance claims by the overall number of claims received by the insurance company, then multiplying the result by 100. For instance, if an insurer receives 10,000 new claims within a specific year and resolves 9,800 of those claims while keeping the rest unresolved due to various reasons, the claim settlement ratio for that year would be calculated as (9,800/10,000 × 100), which equals 98%. As a general guideline, a claim settlement ratio exceeding 80% is deemed favorable. Leading insurance firms in the nation consistently maintain a claim settlement ratio surpassing 95%.
Why claim settlement ratio should be considered while buying life insurance?
Considering the claim settlement ratio when purchasing life insurance is pivotal. It reflects the insurer’s reliability, ethical practices, and efficiency in processing claims. A high ratio not only assures timely financial support for beneficiaries but also offers peace of mind and effective financial planning.
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Updated: 16 Sep 2023, 12:39 PM IST