LIC: No.1 in Claim Settlements of Life Insurance Industry

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Written by The RupeeManager Team

Friday, 30 December 2011 21:45

As per IRDA's annual report for the year 2010-11, LIC's well oiled claim settlement machinery has done way better than private life insurance companies.

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.

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.

A K Dasgupta, LIC's Managing Director has an insight into the life insurance industry by saying, ""Insurance is not what you sell, but deliver." "People trust LIC because of our strong claims settlement record. (Source: ET)"

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.

The improved claim settlement ratio for private life insurance companies stands at 86.04 % during the financial year 2010-11 when compared to 84.87 % during the previous year.

Regarding pending claims, private life insurance companies 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.

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