LIC beats Pvt Companies in Claim Settlement Ratio

Dec 29th, 2011No Comments

The Insurance Regulatory and Development Authority has said that the LIC of India has performed better in terms of claim settlement ratios as compared to private life insurance companies.

The claim settlement ratio of LIC was better than that of the private life insurers. Settlement ratio of LIC increased to 97.03 % during the year 2010-11 when compared to 96.54 % during the previous year” IRDA said in its annual report released this week.

The percentage of claims rejected by LIC stood at 0.01%. The ratio of repudiations to total reported claims declined from 1.21% in the previous year to 1.00% in 2010-11. Compared to LIC, private insurers rejected a large number of claims. Their ratio of repudiations increased to 8.90% in 2010-11 from 7.61 % in 2009-10. Overall, the industry’s settlement ratio has improved slightly at 95.58 % in 2010-11 from 95.24 % in 2009-10 but the repudiation ratio has also gone up to 2.04 % in 2010-11 from 1.93 % in 2009-10.
Private insurers have improved their performance but their settlement ratio is much lower than LIC. For private companies, the improved claim settlement ratio stands at 86.04 % during the financial year 2010-11 when compared to 84.87 % during the previous year.

When it came to pending claims, LIC’s numbers are again better. As compared to private companies which had 5.36% of total claims yet to be settled at the end of the year, LIC had only 0.33% claims pending. While over 75% of LIC’s claims were outstanding for less than three months, in the case of private companies 54% of claims were pending between three to six months.

In the year 2010-11, the life insurance companies have settled 8.13 lakh claims on individual policies, with a total payout of Rs 7,595 crore. The number of claims repudiated was 17,350 for an amount of Rs 336 crore. The number of claims pending at the year-end was 16,415 and the amount involved was Rs 306 crore.

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