ICICI Pru tops the list for life insurance claim settlement in Q1FY24. HDFC Life and SBI Life follow close behind | spcilvly

Securing the financial future of our loved ones is a responsibility that affects us all. As the insurance landscape flourishes, it is crucial to highlight a key determinant of an insurer’s reliability: the claim settlement rate. While many factors influence the choice of a life insurance policy, the claim settlement rate is often overlooked despite its profound importance.

Let’s take a look at the life insurance company’s latest claim settlement ratio for Q1FY24.

Source: Data taken from public disclosure available on the company's website.

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Source: Data taken from public disclosure available on the company’s website.

The graph clearly highlights that ICICI Prudential Life Insurance stands at the top of the graph by resolving 97.9% of the complaints received and providing the best customer service. ICICI Prudential Life Insurance has always maintained 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 claim settlement ratio of 95.8%, HDFC Life with a claim settlement ratio of 96.7%.

An interesting fact is that under its ‘Claim for sure’ initiative, death claims will be resolved within 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 hardship this loss causes for families.

How is it calculated?

A claims settlement ratio highlights the proportion of insurance claims that an insurer successfully addresses compared to the total claims submitted by policyholders or their beneficiaries. This ratio is calculated by dividing the total count of resolved insurance claims by the total number of claims received by the insurance company and then multiplying the result by 100. For example, if an insurer receives 10,000 new claims within a specific year and resolves 9,800 of those claims and keep the rest unresolved for various reasons, the claim settlement ratio for that year would be calculated as (9,800/10,000 Γ— 100), which is equivalent to 98%. As a general guideline, a claim settlement ratio greater than 80% is considered favorable. The country’s leading insurance companies consistently maintain a claim settlement rate exceeding 95%.

Why should the claim settlement ratio be considered when purchasing life insurance?

It is essential to consider the claim settlement ratio when purchasing life insurance. It reflects the insurer’s reliability, ethical practices and efficiency in processing claims. A high ratio not only ensures timely financial support to beneficiaries, but also offers peace of mind and effective financial planning.

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Updated: September 16, 2023, 12:39 pm IST

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