Remarks Payment Record associated with Confidential Insurance Organizations

As you may know, there are actually 20 odd private life insurance companies in India, and there's LIC which is a public sector company. LIC may be the 800 pound gorilla, managing to hold onto about 75% business even A decade after private companies have already been allowed in to the insurance coverage space. The private life companies position themselves on being more customer friendly, wider assortment of products etc while LIC holds up on its positioning of trust, experience and government backing. One of the key parameters on what to judge a life insurance company is their claims monthly payment record. At the same time, we need to keep in mind that seeing that life is becoming more of a savings and investment product, the returns them to provide are perhaps a bigger factor than states payout ratios. Nevertheless, claims record is obviously not just a variable to generally be ignored. A table illustrating the claims rejection percentages in the top life insurance policy companies in 2009-10 is presented below:
Life Companies: Claims rejection ratio (%)
LIC: 1.21%
Aviva: 9.75%
Bajaj Allianz: 5.2%
Birla SunLife: 10.62%
HDFC Life: 4.67%
ICICI Prudential: 3.27%
ING Vysya: 4.26%
Kotak Mahindra:4.29%
Max New York Life:12.31%
MetLife: 5.94%
Reliance Life:7.05%
SBI Life:14.75%
Tata AIG: 12.3%
An essential observation through the above table is always that the claims rejection ratio of LIC is a lowest, thus implying that their record is a better as far as claims payment can be involved. At the same time, the high percentage of claims negativity of SBI Life and Max Ny Life surely comes into play as a surprise.
It has to however be noted yet again that in Unit Linked goods that life organisations promote aggressively (or otherwise was promoting till Sep 2010), the returns earned over the fund is probably a very important variable compared to the claims payment (or rejection) ratio. However, for non life companies, that offers pure protection/insurance products without the need of savings or investment component, claims payment is definitely the crucial variable combined with the speed of processing of claims.

Let us now look at the incurred claims ratios on the non-life companies:

Non-Life Insurance Company: Incurred claims ratio

New India Assurance: 89%

Oriental Insurance: 99.69%

United India Insurance: 78.62%

National Insurance: 99.16%

Royal Sundaram: 68.95%

Reliance General Insurance:77.3%

Iffco Tokio Insurance:83.44%

Tata AIG: 60.54%

ICICI Lombard: 85.35%

Bajaj Allianz:71.9%

HDFC Ergo: 80.73%

Bharti Axa:104%%

One data point that is an abbreviation for out previously mentioned is that Tata AIG Standard Insurance appears to be sourcing the best quality business from the underwriting mindset, whereas the claims payment ratio of Bharti Axa appears to be quite high. Alo,the claims payment ratio in the public insurers, at a general level, is more than those of the private non life insurers.