What is Claim Settlement Ratio?
Claim Settlement Ratio gives us an idea about the claim solving ability of the insurance company. If claims are intimated and the insurance company solves those, claim settlement ratio would be good. In simple words – claim settlement ratio is the number of claims settled by the insurance company out of every 100 claims it has received.
What we need to check in CSR?
Higher claim settlement ratio implies that majority of claims are getting solved. Higher is the claim settlement ratio for the company, the better the company.
What is Claim Repudiation Ratio?
A repudiation ratio is a measure of claims rejected by the insurance company. Claim repudiation ratio gives us an idea about the percentage of the claims rejected by the insurer to total claims made. In simple words – Claim repudiation ratio is the number of claims rejected by the insurance company out of every 100 claims it has received.
What we need to check in CRR?
The lower this ratio, the higher the settlement of claims. So lower the CRR, better for proposer. But sometimes it won’t give clear idea because the reasons for rejection could be false claims, untimely intimation, coverage not covered under the policy etc.
How do claims ratios help me?
The point of these claim ratios is to make you aware about the claim handling by the insurer. In case of unfortunate demise, your loved ones should not face problems of getting the claim amount. The claim ratios assist you in making comparison of life insurance companies. However new insurance companies typically have low settlement ratio but it does not depict the real picture. If claims are being made so early in the term, there’s possibility of fraudulent cases. Also new insurer might have 20 claims compared to veteran insurer with 2000 cases which tips the ratio in latter’s favour.
Should I follow claim ratio in making decision?
Claim ratios are just mathematical tool in making the analysis. They might not reflect the true scenario. Example- An insurer gets 10 claims out of which just 3 genuine claims are settled. Claim settlement ratio would just be 42% which would be unfair to insurer as 7 cases turned out to be fraud. It is important to keep holistic view while making the decision, consider ratios but also products benefits, quotes etc too.
Moreover, while buying an insurance cover you should also need to focus on the insurance companies claim settlement ratio, profitability of the insurance company, premiums charged,
While buying an insurance policy you should incorporate some financial planning aspects such as your age, number of dependents in the family, your income income, expenses etc. which will help you to assess your Human Life Value (HLV), and lead you to buy the right insurance cover
Life Insurers Claim Ratios for FY 2007-08
Life Insurers Claim Ratios for FY 2008-09
Life Insurers Claim Ratios for FY 2009-10
Life Insurers Claim Ratios for FY 2010-11
Life Insurers Claim Ratios for FY 2011-12
Life Insurers Claim Ratios for FY 2012-13
Life Insurers Claim Ratios for FY 2013-14
Life Insurers Claim Ratios for FY 2014-15