Oriental, Iffco top in claim settlements

Mumbai: Oriental Insurance and Iffco Tokio had the highest claims settlement ratio among public and large private sector non-life insurance companies, respectively, in FY20. New India Assurance had the highest net promoter score, according to a report published by the Insurance Brokers Association of India.

The claims settlement ratio is seen as a key reflection of service by an insurer. It is arrived at by dividing the sum of claims settled during the fiscal as a percentage of the same available for processing. While Oriental Insurance settled 91.5% of claims that came up for processing, Iffco Tokio had a settlement ratio of 92.5% for overall claims across segments. The two insurers topped the list of claims settlement ratio in the health segment as well (93.9% and 96.3%, respectively). Both also did well in the motor own-damage segment, which is a major contributor to claims.

When it comes to speedy claims settlements too, Oriental Insurance topped the list with an efficiency ratio of 87.1%. This reflects the number of claims tackled within three months of reporting. In the private sector, Bajaj Allianz had the highest claims settlement efficiency of 87.9%.

According to brokers, the extent of claims that an insurer receives depends on the nature of business they underwrite. Companies that cover retail risks such as health insurance and motor tend to have a higher number of claims as these are verticals with a high frequency of the same. Of late, insurers have been providing extended warranty covers for electronics purchased by tying up with the distributors. Such businesses too have low-value high frequency claims.

In terms of number of claims, New India Assurance tops the list with 75 lakh processed during FY20. Among private players, Bajaj Allianz General Insurance has the most number of claims at 60.5 lakh.

According to insurance brokers, many private companies tend to cherry pick retail businesses, avoiding those with chronic underwriting losses. While public sector insurers are more liberal in accepting businesses, they tend to raise queries about the proposals, which should have been done at the underwriting stage.