Individuals purchase general insurance to protect against emergencies, preventing them from incurring large out-of-pocket expenses. They not only invest their money but also place their trust when making premium payments. Nonetheless, not every claim receives approval. A recent report indicates that the claim-to-settlement ratio, reflecting the number of claims paid by insurers, stood at 86% in 2022-23, a decrease from 87% in FY22.
The comprehensive report from the Insurance Brokers Association of India (IBAI), based on data provided by insurance firms, shows that the claims repudiation ratio increased to 6% for general insurance, encompassing motor, health, fire, and marine cargo coverage.
This claim was denied by an insurance company as a percentage of the total claims submitted by its policyholders.
The public sector insurer New India Assurance boasts the lowest claims rejection ratio at 0.2%.
Other major private insurers that have higher rates of claims acceptance include HDFC Ergo, Future Generali, Aditya Birla Health, and Shriram.
The insurance regulator IRDAI has made it compulsory for insurance firms to display settlement and rejection information on their websites. The IBAI has gathered data from insurers and compiled it into a report, which may assist individuals in making informed decisions regarding a company’s history when purchasing insurance policies.
The IBAI has categorized the general insurers into four groups in the Policyholder’s Handbook: Public Sector General Insurers, Large Private Sector General Insurers, Other Private Sector Insurers, and Standalone Health Insurers.
In the health insurance sector as well, New India Assurance ranked first among public insurers, achieving a claim-settlement ratio of 95%.
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Aditya Birla Health, featuring a claim settlement ratio of 95%, was the top performer among independent health insurers.
According to the IBAI handbook, Iffco Tokio and Bajaj Allianz ranked as top large private sector general insurers, boasting an impressive claims-to-settlement ratio of 90% or higher.
It is important to note that health insurance consists of combined data from group (corporate) and individual policies. Historically, claim-rejection rates are fewer for corporate policies.
“Irdai does not provide separate data for individual and group claims.” Why not? “Who is it safeguarding?” inquired author-influencer Monika Halan.
The true picture will become clear once distinct claim-settlement information is accessible for each health insurance policy.
Among major private sector insurers regarding their own-damage claim settlements, Royal Sundaram, Go Digit, and SBI General ranked highest. Future Generali ranked highest among small insurance providers.
In India, the insurance coverage, whether life or general, is minimal, but the tax on insurance premiums stands at a high rate of 18%.
In India, the insurance penetration rate stands at 30%, which is low compared to developed nations such as the US, where it exceeds 90%.
Even with no social safety net and a weak government healthcare system, the steep 18% GST on insurance premiums is illogical.
