As you are aware, claim settlement ratio is a crucial metric as it serves as an indicator of an insurance company's commitment to its policyholders, reflecting the company's ability to fulfill its promise of offering financial security and assistance during challenging times. More importantly, having a consistent QoQ ratio helps customers take an informed decision.

Among life insurance companies, ICICI Prudential Life Insurance consistently holds the top position in claim settlement ratios. According to the latest data compiled from public disclosures filed by life insurers, ICICI Prudential Life achieved an impressive claim settlement ratio of 98.14% in Q2-FY2024. This outstanding performance underscores the insurer's dedication to providing exceptional customer service and ensuring that policyholders receive timely and equitable claim settlements.

ICICI Prudential Life's consistently high claim settlement ratio has established a reputation for reliability and trustworthiness among its customers. This accomplishment reaffirms the insurer's commitment to improving its services and upholding customer satisfaction. A noteworthy detail is that, according to the company's 'Claim for Sure initiative,' death claims will be promptly settled within a day, subject to certain terms and conditions. Through this service initiative, the company strives to alleviate the financial burden experienced by families in the aftermath of such losses.

How is it calculated? A claim settlement ratio highlights the proportion of insurance claims that an insurer successfully addresses in comparison to the total claims lodged by policyholders or their beneficiaries. This ratio is computed by dividing the total count of settled insurance claims by the overall number of claims received by the insurance company, then multiplying the result by 100. For instance, if an insurer receives 10,000 new claims within a specific year and resolves 9,800 of those claims while keeping the rest unresolved due to various reasons, the claim settlement ratio for that year would be calculated as (9,800/10,000 × 100), which equals 98%. As a general guideline, a claim settlement ratio exceeding 80% is deemed favorable. Leading insurance firms in the nation consistently maintain a claim settlement ratio surpassing 95%. Timely settlement is pivotal for insurance companies to build trust and long-term relation.

A quick overview on the claim settlement ratios from few key insurance providers.

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