LIC still tops industry in claim settlement, says IRDAI Annual Report

Life Insurance Corporation of India (LIC) still maintains the lead in the life insurance industry with respect to claim settlement. In the year 2013-14, the life insurance companies had settled 8,57,000 claims on individual policies, with a total payout of Rs 10,860.59 crore, said the Insurance Regulatory and Development Authority of India (IRDAI) Annual Report.

The claim settlement ratio of LIC was better than that of the private life insurers. The settlement ratio of LIC had increased to 98.14% during the year 2013-14 when compared to 97.73% during the previous year. The percentage of repudiations was 1.10% in 2013-14 remaining almost at the same level (1.12%) as of the previous year.

For private insurers, settlement ratio had gone down slightly to 88.31% during the financial year 2013-14 when compared to 88.65% during the previous year. Private insurers had repudiated more (10,036) number of claims when compared to (8,387) of LIC. The percentage of repudiations for private insurers was 8.03% in 2013-14 which was 7.85% for 2012-13.

However, IRDAI's annual report said that the industry's settlement ratio had slightly increased to 96.75% in 2013-14 from 96.41% in 2012-13 and the repudiation ratio had remained almost at the same level of 2.08% in 2013-14 as in 2012-13 (2.10%).

The number of claims repudiated was 18,423 for an amount of Rs 624.43 crore. The number of claims pending at the year-end was 8,497 and the amount involved was Rs 450.41 crore. Of these, 1861 claims were pending for more than one year and 6,636 claims were pending for less than and up to one year.

In Group Life Insurance, during 2013-14, the total intimated claims were 4,11,647 while 14,331 claims were pending at the beginning of the year. Out of these, life insurance industry had settled a total of 4,09,897 (96.22% of the total claims) claims. Here, 96.57% of these were settled within 30 days of intimation. Only 0.01% of the claims took more than a year to get settled.

Here too, LIC maintained the lead. While LIC settled 99.65% of the claims, the private life insurers paid 90.45% of all claims. The industry repudiated 0.45% of the claims, written back 0.0002% of the claims and the remaining 3.32% of the claims submitted were pending as at March 31, 2014.

On the general insurance side, the net incurred claims of the non-life insurers stood at Rs 45692 crore in 2013-14 as against Rs 39624

crore in 2012-13. The incurred claims exhibited an increase of 15.32% during 2013-14. While the public sector insurers reported an increase of 11% in the incurred claims, the same for private insurers was at 22.74%.

Overall the increase in incurred claims during 2013-14 at 15.32% was higher than 13.16% recorded during the previous year. The incurred claims ratio (net incurred claims to net earned premium) of the non-life insurance industry was 81.74% during 2013-14 which is less than that of the previous year figure of 82.79%.

Among the various segments, Health insurance and Motor insurance had a high claims ratio at 100.73% and 79.50% respectively. The incurred claims ratio of the Motor segment decreased to 79.50 in the year 2013-14 from the previous year's ratio of 88.63.

The status of complaints too, said IRDAI, are now available on a real-time basis with the implementation of the Integrated Integrated Grievance Management System (IGMS). As on March 31, 2014, there were 1180 complaints pending resolution by life insurance companies. During the year 2013-14, the life insurance industry received 374620 complaints out of which 85284 complaints related to LIC and 289336 complaints related to private sector life insurers.

During 2013-14, the insurance companies resolved 99.69% of the complaints handled. While the private life insurers resolved 99.83% of the complaints registered, LIC resolved 100% of the complaints as a result of which there were no complaints of LIC pending as on March 31, 2014.

The non-life insurance companies resolved 98.71% of the complaints handled during the year 2013-14. The private non-life insurance companies resolved 99.67% and public non-life insurance companies resolved 96.36% of the complaints handled by them. As on March 31, 2014, 834 complaints were still pending with the insurance companies for resolution, out of which 152 belonged to private sector and 682 pertain to public sector non-life insurance companies.