The claims settlement record of insurance companies has improved in financial year (FY) 2015, compared to the previous year, in life an non-life categories. This is according to the latest Insurance Regulatory Authority of India (Irdai) annual report, for 2014-15. Let’s take a closer look at the numbers on claim settlement for life insurers and health and motor segments of non-life companies to see what they mean for you.
Life insurance
Life Insurance Corp. of India (LIC) had the highest claims settlement record at 98.19% in FY15 in the retail space. The year before it was marginally lower at 98.14%. Claims settlement is defined as the number of claims paid or settled as against number of claims received. This is usually measured in terms of number of policies and benefit amount, and Mint has gone through the number of policies. Private sector as a whole settled 89.40% claims in FY15 compared to 88% in the previous year.
Even as the private sector has shown slight improvement, it continues to reject more claims than LIC does. They received an aggregate of 121,927 claims, of which they rejected 9,486. LIC received a much higher number of claims—755,901—but rejected only 8,689. In fact, the rejection ratio has been higher for private sector life insurers in the past five years. However, the rejection ratio has been 7.6% for private sector companies on an average for the last decade.
