LIC scores best in claims settlement during 2010-11

At a time when customer service and satisfaction is becoming the key to success for life companies, the (in case of death claims) has improved over the last financial year. According to data from company sources, the Life Insurance Corporation of India (LIC) still remains the benchmark when it comes to settling death claims. However, major private players are also fast catching up.

A repudation ratio is a measure of claims rejected.

During 2010-11, improved its repudiation ratio for to 1.09 per cent from 1.21 per cent in the previous year. In the same period, the public sector insurance behemoth settled 97.5 per cent of death claims, whereas claims pending stood at 1.47 per cent.

“Overall, we have settled 99.6 per cent of the total claims in the last financial year. And 95 per cent of the death claims were settled within 15 days of intimation,” said a senior LIC official.

In total, during the 2010-11, LIC has settled around 18.3 million claims amounting to Rs 53,000 crore, which includes survival benefits, maturity and death claims. Of this, Rs 6,000 crore accounted for 721,000 death claims.

Among the private players, ICICI Prudential Life was the best performer in terms of claims repudiation ratio, whereas HDFC Life’s claims settlement ratio was the highest, respectively.

ICICI Prudential’s claims repudiation ratio stood at 2.8 per cent, whereas for HDFC Life it was at 3.97 per cent. During the same time, HDFC Life settled 96.03 per cent of the total death claims, while ICICI Prudential settled 94.4 per cent of claims. Claims pending for HDFC Life and ICICI Prudential stood at 0.61 per cent and 2.6 per cent, respectively.

Among the established players, the repudiation ratio for SBI Life and Max New York Life worsened to 16.74 and 14.85, respectively.

For the smaller or relatively new private life insurance players, the ratio still remains on the higher side. For instance, India First Life, which began operation in 2009, had a repudiation ratio at 9.4 per cent, whereas for IDBI Federal Life which started in 2007, it was 21 per cent.

 

CLAIMS REPORT
  2009-10 ** 2010-11***
Claims 
repudiated
Claims 
settled 
Claims
pending 
Claims
repudiated 
Claims
settled 
Claims
pending
LIC 1.21 96.53 1.41 1.09 97.50 1.47
ICICI Prudential 3.27 90.17 6.56 2.80 94.40 2.60
HDFC Life 4.67 91.14 4.20 3.97 96.03 0.61
Aviva Life 9.75 87.11 3.14 4.10 87.11* 3.14*
Birla Sun Life 10.62 89.09 5.82 4.99 94.66 0.35
India First Life 7.69 53.85 38.46 9.40 90.58 0.03
Max New York Life 12.31 65.51 7.14 14.85 78.01 7.14
SBI Life  14.75 83.27 1.96 16.74 82.24 1.03
IDBI Federal Life 23.81 49.52 26.67 21.00 65.00 14.00
* Close to year ago figures;  **  Irda Figures;  *** Unaudited figures

 

“The repudiation ratio improves over a period of time as in a death within two years (early death claims) of the issue of the policy requires investigation. So, for the newer companies the proportion of early death claims always remains high. Hence, the ratio is becomes skewed,” said an official at a private life insurance company.

Settlement of any insurance claim involves interpretation of a lot of technical conditions generally used by insurers to reject the claims. However, non-early death claims (claims after two years of the issue of the policy) do not mandate any investigation. Hence, the settlement procedure is faster and easier.

image
Business Standard
177 22
Business Standard

LIC scores best in claims settlement during 2010-11

Niladri Bhattacharya  |  Mumbai 



At a time when customer service and satisfaction is becoming the key to success for life companies, the (in case of death claims) has improved over the last financial year. According to data from company sources, the Life Insurance Corporation of India (LIC) still remains the benchmark when it comes to settling death claims. However, major private players are also fast catching up.

A repudation ratio is a measure of claims rejected.

During 2010-11, improved its repudiation ratio for to 1.09 per cent from 1.21 per cent in the previous year. In the same period, the public sector insurance behemoth settled 97.5 per cent of death claims, whereas claims pending stood at 1.47 per cent.

“Overall, we have settled 99.6 per cent of the total claims in the last financial year. And 95 per cent of the death claims were settled within 15 days of intimation,” said a senior LIC official.

In total, during the 2010-11, LIC has settled around 18.3 million claims amounting to Rs 53,000 crore, which includes survival benefits, maturity and death claims. Of this, Rs 6,000 crore accounted for 721,000 death claims.

Among the private players, ICICI Prudential Life was the best performer in terms of claims repudiation ratio, whereas HDFC Life’s claims settlement ratio was the highest, respectively.

ICICI Prudential’s claims repudiation ratio stood at 2.8 per cent, whereas for HDFC Life it was at 3.97 per cent. During the same time, HDFC Life settled 96.03 per cent of the total death claims, while ICICI Prudential settled 94.4 per cent of claims. Claims pending for HDFC Life and ICICI Prudential stood at 0.61 per cent and 2.6 per cent, respectively.

Among the established players, the repudiation ratio for SBI Life and Max New York Life worsened to 16.74 and 14.85, respectively.

For the smaller or relatively new private life insurance players, the ratio still remains on the higher side. For instance, India First Life, which began operation in 2009, had a repudiation ratio at 9.4 per cent, whereas for IDBI Federal Life which started in 2007, it was 21 per cent.

 

CLAIMS REPORT
  2009-10 ** 2010-11***
Claims 
repudiated
Claims 
settled 
Claims

pending 
Claims
repudiated 
Claims
settled 
Claims
pending
LIC 1.21 96.53 1.41 1.09 97.50 1.47
ICICI Prudential 3.27 90.17 6.56 2.80 94.40 2.60
HDFC Life 4.67 91.14 4.20 3.97 96.03 0.61
Aviva Life 9.75 87.11 3.14 4.10 87.11* 3.14*
Birla Sun Life 10.62 89.09 5.82 4.99 94.66 0.35
India First Life 7.69 53.85 38.46 9.40 90.58 0.03
Max New York Life 12.31 65.51 7.14 14.85 78.01 7.14
SBI Life  14.75 83.27 1.96 16.74 82.24 1.03
IDBI Federal Life 23.81 49.52 26.67 21.00 65.00 14.00
* Close to year ago figures;  **  Irda Figures;  *** Unaudited figures

 

“The repudiation ratio improves over a period of time as in a death within two years (early death claims) of the issue of the policy requires investigation. So, for the newer companies the proportion of early death claims always remains high. Hence, the ratio is becomes skewed,” said an official at a private life insurance company.

Settlement of any insurance claim involves interpretation of a lot of technical conditions generally used by insurers to reject the claims. However, non-early death claims (claims after two years of the issue of the policy) do not mandate any investigation. Hence, the settlement procedure is faster and easier.

RECOMMENDED FOR YOU

LIC scores best in claims settlement during 2010-11

At a time when customer service and satisfaction is becoming the key to success for life insurance companies, the claim repudiation ratio (in case of death claims) has improved over the last financial year. According to data from company sources, the Life Insurance Corporation of India (LIC) still remains the benchmark when it comes to settling death claims. However, major private players are also fast catching up.

At a time when customer service and satisfaction is becoming the key to success for life companies, the (in case of death claims) has improved over the last financial year. According to data from company sources, the Life Insurance Corporation of India (LIC) still remains the benchmark when it comes to settling death claims. However, major private players are also fast catching up.

A repudation ratio is a measure of claims rejected.

During 2010-11, improved its repudiation ratio for to 1.09 per cent from 1.21 per cent in the previous year. In the same period, the public sector insurance behemoth settled 97.5 per cent of death claims, whereas claims pending stood at 1.47 per cent.

“Overall, we have settled 99.6 per cent of the total claims in the last financial year. And 95 per cent of the death claims were settled within 15 days of intimation,” said a senior LIC official.

In total, during the 2010-11, LIC has settled around 18.3 million claims amounting to Rs 53,000 crore, which includes survival benefits, maturity and death claims. Of this, Rs 6,000 crore accounted for 721,000 death claims.

Among the private players, ICICI Prudential Life was the best performer in terms of claims repudiation ratio, whereas HDFC Life’s claims settlement ratio was the highest, respectively.

ICICI Prudential’s claims repudiation ratio stood at 2.8 per cent, whereas for HDFC Life it was at 3.97 per cent. During the same time, HDFC Life settled 96.03 per cent of the total death claims, while ICICI Prudential settled 94.4 per cent of claims. Claims pending for HDFC Life and ICICI Prudential stood at 0.61 per cent and 2.6 per cent, respectively.

Among the established players, the repudiation ratio for SBI Life and Max New York Life worsened to 16.74 and 14.85, respectively.

For the smaller or relatively new private life insurance players, the ratio still remains on the higher side. For instance, India First Life, which began operation in 2009, had a repudiation ratio at 9.4 per cent, whereas for IDBI Federal Life which started in 2007, it was 21 per cent.

 

CLAIMS REPORT
  2009-10 ** 2010-11***
Claims 
repudiated
Claims 
settled 
Claims
pending 
Claims
repudiated 
Claims
settled 
Claims
pending
LIC 1.21 96.53 1.41 1.09 97.50 1.47
ICICI Prudential 3.27 90.17 6.56 2.80 94.40 2.60
HDFC Life 4.67 91.14 4.20 3.97 96.03 0.61
Aviva Life 9.75 87.11 3.14 4.10 87.11* 3.14*
Birla Sun Life 10.62 89.09 5.82 4.99 94.66 0.35
India First Life 7.69 53.85 38.46 9.40 90.58 0.03
Max New York Life 12.31 65.51 7.14 14.85 78.01 7.14
SBI Life  14.75 83.27 1.96 16.74 82.24 1.03
IDBI Federal Life 23.81 49.52 26.67 21.00 65.00 14.00
* Close to year ago figures;  **  Irda Figures;  *** Unaudited figures

 

“The repudiation ratio improves over a period of time as in a death within two years (early death claims) of the issue of the policy requires investigation. So, for the newer companies the proportion of early death claims always remains high. Hence, the ratio is becomes skewed,” said an official at a private life insurance company.

Settlement of any insurance claim involves interpretation of a lot of technical conditions generally used by insurers to reject the claims. However, non-early death claims (claims after two years of the issue of the policy) do not mandate any investigation. Hence, the settlement procedure is faster and easier.

image
Business Standard
177 22
Widgets Magazine

More News

Widgets Magazine
Widgets Magazine
Advertisement

Upgrade To Premium Services

Welcome User

Business Standard is happy to inform you of the launch of "Business Standard Premium Services"

As a premium subscriber you get an across device unfettered access to a range of services which include:

  • Access Exclusive content - articles, features & opinion pieces
  • Weekly Industry/Genre specific newsletters - Choose multiple industries/genres
  • Access to 17 plus years of content archives
  • Set Stock price alerts for your portfolio and watch list and get them delivered to your e-mail box
  • End of day news alerts on 5 companies (via email)
  • NEW: Get seamless access to WSJ.com at a great price. No additional sign-up required.
 

Premium Services

In Partnership with

 

Dear Guest,

 

Welcome to the premium services of Business Standard brought to you courtesy FIS.
Kindly visit the Manage my subscription page to discover the benefits of this programme.

Enjoy Reading!
Team Business Standard