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Claim Settlement Ratio 2023

Welcome to the insightful world of insurance, where the Claim Settlement Ratio (CSR) takes centre stage in 2023. As a crucial indicator of an insurer's reliability, CSR reflects the percentage of claims settled against those filed. Join us as we delve into the latest CSR trends, unveil their significance for policyholders, and explore how it shapes the insurance landscape this year. Let's unravel the numbers and uncover the truth behind this vital statistic.

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What is Life Insurance Claim Settlement Ratio?

According to its definition, the insurance claim settlement ratio (CSR) denotes the proportion of claims an insurance company can effectively meet in a given fiscal period out of the total claims received. Thus, CSR holds paramount importance as it verifies the insurer's reliability, guaranteeing a prompt and efficient resolution for your insurance claims.

In the realm of life insurance, the life insurance claim settlement ratio carries exceptional significance, ensuring your family's immunity against financial hardships during times of necessity. Consequently, a higher claim settlement ratio translates to enhanced credibility for the insurance provider. The effectiveness of a commendable life insurance policy and provider is distinguished by their ability to settle claims entirely within stipulated regulatory timeframes.

You can access the claim settlement ratio of your insurance provider through the official website of the Insurance Regulatory and Development Authority of India (IRDAI).

Why is a Claim Settlement Ratio Important?

When acquiring a life insurance policy from a provider, several aspects capture your attention – their offerings, customer reviews, and more. Yet, the pivotal factor warranting thorough exploration is the life insurance claim settlement ratio. This statistic serves as the cornerstone for selecting an insurer to safeguard your future.

A robust claim settlement ratio is of paramount importance for both insurance providers and policyholders. It forms the backbone of an insurance company's operations and directly impacts the relationship between insurers and their customers. Let's delve into why a seamless claim settlement ratio is crucial:

  1. Customer Trust and Satisfaction: A prompt and hassle-free claims process enhances customer trust and satisfaction. It assures policyholders that the insurance company stands by its commitment to provide financial support during times of need. A positive claims experience strengthens customer loyalty and encourages policy renewals.
  2. Financial Security: Insurance policies are meant to offer financial security during unforeseen events. A well-functioning claims settlement ratio ensures that policyholders receive the necessary funds when they file a valid claim. This financial assistance helps individuals and businesses recover from losses and continue their operations without major disruptions.
  3. Reputation: An insurance company's reputation is closely tied to its claim settlement process. Efficiently settling claims portrays the insurer as reliable and empathetic, while delays or complications can tarnish the company's image. Positive word-of-mouth and reviews about claim experiences can significantly impact an insurer's standing in the market.
  4. Regulatory Compliance: Insurance is a heavily regulated industry, and claim settlement practices are subject to strict regulatory guidelines. A robust system ensures that the insurer remains compliant with industry standards and avoids legal issues that can arise from improper claims handling.
  5. Cost Efficiency: An efficient claims settlement process reduces operational costs for insurance companies. Automated systems, accurate documentation, and streamlined workflows minimize administrative efforts, allowing the insurer to allocate resources effectively.
  6. Data Insights: An effective claims settlement ratio generates valuable data that can be analyzed to identify trends, patterns, and potential risks. Insurers can use this information to improve their products, enhance customer service, and implement preventive measures to mitigate future risks.
  7. Competitive Edge: In a competitive insurance market, a smooth claims settlement process can serve as a significant differentiator. Customers are more likely to choose an insurer with a reputation for hassle-free claims, even if the premiums are slightly higher.
  8. Speedy Recovery: For policyholders, a quick claims settlement means they can recover and resume their normal lives or operations faster. Whether it's a medical emergency, property damage, or any other covered event, a swift claims process eases the financial burden and stress.
  9. Employee Morale: An efficient claims settlement system positively impacts employee morale within the insurance company. Claims handlers and customer service representatives are better equipped to assist policyholders when the process is smooth and well-structured.

How is a Claim Settlement Ratio Calculated?

Determining your insurance provider's claim settlement ratio is a straightforward process, achievable through the following formula:

Claim Settlement Ratio (CSR) = (Total number of approved claims / Total number of received claims) x 100

The outcome is invariably presented as a percentage. For instance, when a life insurance company boasts a claim settlement ratio of 90%, it signifies that they've successfully resolved 90 out of 100 claims they received. A notable example is Tata AIA Life Insurance, boasting a robust claim settlement ratio of 99.01%* during FY 2022-23, a testament to their reliability.

An esteemed life insurance provider not only ensures prompt claim honouring within the stipulated regulatory Turn-Around-Time (TAT), but they also facilitate a hassle-free claims submission process. Some insurers even opt to disclose both the monetary sum disbursed in successful claims and the quantity of policies for which claims have been effectively settled, further establishing their credibility.

Claim Settlement Ratio of Life Insurance Companies in India

Following is the list of claim settlement ratio of the best life insurance companies in India:

Life Insurance Company

Claim Settlement Ratio 2020-21

Number Of Claims Paid 2020-21

Max Life Insurance



Aegon Life Insurance



Bharti Axa Life Insurance



Life Insurance Corporation of India (LIC)



Dhfl Pramerica Life Insurance



Exide Life Insurance



Kotak Life Insurance



Reliance Life Insurance



Bajaj Allianz Life Insurance



PNB MetLife Insurance



Tata AIA Life Insurance



HDFC Life Insurance



Aviva India Life Insurance



ICICI Prudential Life Insurance



Aditya Birla Sun Life Insurance



Sahara India Life Insurance



Canara HSBC Life Insurance



Edelweiss Tokio Life Insurance



IndiaFirst Life Insurance



Daiichi Life Insurance



Shriram Life Insurance



Ageas Federal Life Insurance



Future Generali Life Insurance



SBI Life Insurance



(Source: IRDAI Annual Report - Claim Settlement Ratio for the year 2020-21)

Factors That May Influence Your Claim Settlement

  • Concealing Information: Many individuals tend to withhold facts in order to secure claims without furnishing the required evidence. Yet, this behaviour can arouse suspicion and trigger investigations. If these investigations reveal policyholders' misconduct, claims can be denied, adversely impacting the insurance company's Claim Settlement Ratio.
  • Ignorance By the Policyholder: Allocate time to understand the insurance policy's terms and conditions comprehensively. Failure to grasp policy exclusions may result in claim denials, preventing you from receiving your settlement.
  • Not Disclosing Facts: As the policyholder, refraining from disclosing critical information that could influence the claims process is considered fraudulent. Such actions impede the insurance company's ability to facilitate your claim settlement.
  • Error In Updating Nominee: In the unfortunate event of your demise, your insurer aims to assist your designated nominee in obtaining entitled death benefits through proper channels. Nevertheless, if you fail to provide accurate nominee details or update changes, your insurer won't be equipped to aid your nominee effectively.

What is a Good Claim Settlement System?

When a life insurance company boasts a claim settlement ratio of 90% or higher, it generally signifies a commendable ratio for claim settlements. This percentage reflects that the insurer has successfully resolved 90 out of the 100 claims received within a given financial year.

The life insurance claim settlement system undergoes annual fluctuations, contingent upon the insurer's capacity to settle claims. When acquiring a life insurance policy, this annual percentage, coupled with historical data, holds significance. It highlights whether the insurance provider has maintained a consistent record of honouring the maximum possible claims annually. To gauge the essence of a robust claim settlement system, consider the following points:

  • A substantial claim settlement ratio serves as a transparent signal that your insurer is inclined to acknowledge and resolve your claims punctually.
  • Although a company's financial capacity is typically indicated by the solvency ratio, the claim settlement ratio also portrays the insurer's financial robustness.
  • An impressive life insurance claim settlement ratio instils policy buyers with a sense of assurance, depicting the insurance company as dependable and proficient in disbursing claims.

Types of Life Insurance Claims

Following are the two types of life insurance claims:

1. Maturity Claims: Maturity claims are payable at the time of maturity of the life insurance policy. This means when the policy tenure ends and the policyholder survives the whole policy tenure a certain amount is paid to the policyholder itself. Maturity claims are only paid when the policy term ends and the premiums are paid on time. The policyholder is required to fill a duly signed discharge form to avail maturity claim. The amount received from the maturity claim is considered to be tax-free as per the current Income Tax Act.

2. Death Claims: In death claims, the claimant can make a request for death benefits upon the demise of the policyholder. This means a sum assured amount is settled towards the beneficiary upon the death of the policyholder in any case. The sum assured is paid to the beneficiary only after the death of the policyholder is intimated to the insurance company. The death intimation includes policy number, date of death, cause of death, and the policy term upon which the company investigates the death claim. Amounts received as the death claim are considered to be tax-free as per the current Income Tax Act under Section 10(10D).

Documents Required for Life Insurance Claims

Following is the list of some of the mandatory documents required for life insurance claims:

  • Claim Forms (Duly signed and attested)
  • Original Policy Documents
  • Death Certificate attested by the local authorities
  • Copy of FIR/Post Mortem Reports/Punchnama
  • Medical Records (including hospital discharge summary)
  • Claimant’s Photo ID Proof
  • Claimant’s Address Proof
  • Copy of Cancelled Cheque/Bank Statement/Bank Passbook

Claim Settlement Process of Life Insurance Policy Claims

Listed below is the process of life insurance claim settlement followed by most of the insurance companies. However, every insurance operates differently hence the claim settlement process for a life insurance claim can differ from insurer to insurer:

Step 1: Claim Intimation: The beneficiary is required to intimate the claim either in a written format or online (on the insurance company’s official website) to the insurance company as soon as possible. The claim intimation should have the information of the policyholder and the claimant such as policy number, name of the policyholder, cause of death, place of death, and claimant details. The beneficiary can visit the insurance company for claim intimation or download the forms online from the insurance company’s website.

Step 2: Submission of Documents: The insurance company requires some documents to settle the claim, which the beneficiary is required to submit within the stipulated time. With help of the relevant documents, the insurance company will be able to carry out an investigation if required or ask for any additional documents required. Submission of relevant documents at this stage is necessary to avoid any possibility of fraud.

Step 3: Claim Evaluation and Settlement: After all the documents have been submitted to the insurance company and the claim is thoroughly evaluated a settlement decision is taken by the insurance company. Usually, it takes 30 days for an insurance company to settle a claim upon receiving the documents submitted. If an investigation is required in any case the insurance company takes 120 days to settle a claim.

Note: Claimant must thoroughly go through the terms and conditions and submit all the required documents for the claim, failing to do so will affect the claim settlement process.

Common Reasons For Rejection of Life Insurance Claims

Here is some common reason for rejection of life insurance claims:

1. Mentioning false inaccurate or false information in the application for a life insurance plan.

2. Not paying premiums on the due date or during the grace period.

3. Causes of death that are not covered by the insurance policy such as suicide before the completion of the first policy term, accidental death caused by overconsumption of alcohol/drugs.

4. A fraudulent claim made by the beneficiary.

Common Exclusions Under A Life Insurance Policy

There are certain instances or events which are not covered under a life insurance policy. Below mentioned are the events/instances which are not covered under a life insurance policy:

1. Participating in Hazardous Activities: It is usually mentioned in the policy documents that participating in dangerous or hazardous activities shall not be covered. The reason being this is the high life risk associated with participating in these activities as a result of which these activities are not covered under a life insurance policy. Death of life assured caused by hazardous activities such as skydiving, paragliding, rock climbing, scuba diving, vehicle racing, hang gliding and other such adrenaline pumping activities are not covered under a life insurance policy. Activities that may result in fatal accidents which shall not be covered under a life insurance policy.

2. Pre-existing Medical Condition: Another standard exclusion under a life insurance policy is death due to pre-existing medical condition of the life assured. In case the life assured fails to inform or conceal the pre-existing medical condition from the insurance provider, claim for the same shall not be settled by the insurance provider. In case the life assured passes away due to a pre-existing medical condition during the policy tenure, the insurance company will not provide a claim to the nominee under such circumstances. It is advised to inform the insurance provider about your pre-existing medical condition or mention the medical condition in the application form.

3. Aviation Related Loss: Often, death caused in air crash wherein the life assured was travelling in a private plan shall not covered a life insurance policy. However, if the life assured passes away while travelling in a commercial airplane which follows a set schedule and route, the insurance company will provide a death benefit under such circumstances.

4. Participation in Unlawful Activities: Death caused by participating in unlawful activities is not covered under a life insurance policy. This is also one of the standard exclusions under a life insurance policy. Participation in illegal/unlawful/criminal activities as defined by the law shall not be covered under a life insurance policy. In case of an unforeseen demise of the life assured due to their participation in unlawful activities such as theft, civil riots, burglary, drugs, road rage etc., the death benefit shall not be provided to the nominee/beneficiary.

5. Suicide: A siginicant number of life insurance comapnies do not provide coverage for death due to committing suicide during the policy term. In case of an unfortunate demise of the life assured due to commintiing suicide within the first 12 months of the policy term, only 80% of the total premiums paid till the date od death of the life assured, shall be provided to the nominee/beneficiary by the insurance comapany. The premiums will be provided after excluding proportionate risk coverage amount till the date of death of the life assured and medical examination expenses incurred by the insurance company.

6. Incorrect/Misrepresented Information: Incorrect/misrepresented information can lead to claim denial or even worse policy cancellation. It is advised that all applicants must ensure that they do not misrepresent or state incorrect facts/information about themselves. It is also advised that the applicant should not lie about their actual age. If you do not provide your correct age to the insurer the insurer can deny your claim. In case the insurance provider finds any discrepancies in the information provided by the applicant, the policy can be cancelled.

7. Death Due to Natural Disasters: Selective life insurance companies do not settle claims for death caused in natural disasters. In case the life assured passes away due to natural calamities such as earthquakes, tsunami, hurricanes, cyclones etc., the death benefit shall not be provided to the nominee/beneficiary.

8. Sexually Transmitted Diseases: Sexually transmitted diseases such as HIV/AIDS are usually not covered under a life insurance policy. In case of an unfortunate demise of the life assured due the sexually transmitted diseases, the insurance company shall not provide a death benefit to the nominee/beneficiay under such circumstances.

9. Death Due Drug/Alcohol Abuse: Life insurance does not settle claims for death of life assured caused by drug overdose or excessive alcohol consumption. In fact, life insurance companies rarely issue a life insurance policy for people who consume alcohol on a daily basis or consume narcotics substances. In case life assured has not disclosed these habits at the time of policy issuance, the insurance company is entitled to withhold the death benefit. If the life assured passes away due to excessive alcohol/narcotics substance consumption, the insurance company will not provide a death benefit to the nominee/beneficiary under such circumstances.


In the dynamic realm of insurance, the Claim Settlement Ratio stands as a defining emblem of trustworthiness for insurers in 2023. As policyholders, understanding this statistic empowers us to make informed choices, ensuring our financial security. With a finger on the pulse of the industry, we've uncovered the essence of CSR – a reflection of commitment and accountability. Remember, behind the numbers lies the assurance of a secure tomorrow.

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FAQ About Claim Settlement Ratio 2023

  • Who can make a claim under a life insurance policy?

    Only the beneficiaries can make a claim under a life insurance policy. In case you are a legal heir but not designated as beneficiary, then you cannot make a claim under the policy.

  • Who can be the beneficiary of a life insurance policy?

    When signing a life insurance policy, you are required to nominate the beneficiary(s). You can nominate more than one beneficiary and specify their share for the benefit. Usually, spouses and blood relatives are selected as beneficiaries. But you are allowed to nominate friends by listing the reasons for the same, so as to avoid conflicts with legal heirs. 

  • What is the Claim Settlement Ratio?

    Claim Settlement Ratio is the number of claims settled against the number of claims filed during a financial year. It is a measure to find how good an insurance company is in settling health insurance claims. Hence, you must check the CSR when selecting a life insurance policy. 

  • How will I receive the claim amount?

    You will get the claim amount in the mode selected by you at the time of submitting claim documents. It is recommended to opt for electronic funds transfer to avail quick and hassle-free services. 

  • Which are the top three life insurance companies in terms of the Claim Settlement Ratio?

    Top three life insurance companies in terms of claim settlement ratio are Max Life Insurance, HDFC Life Insurance, and Tata AIA Life Insurance with claim settlement ratios of 99.22%, 99.07%, and 99.06% respectively. 

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