Claim Settlement Ratio Analysis: A Comparative Study Of Indian Term Insurance Companies

Abstract

The claim settlement ratio (CSR) is one of the most important indicators of trust and efficiency in the life insurance industry. It represents the percentage of claims an insurer successfully settles against the total claims received in a financial year. A higher CSR signals reliability, while a lower ratio raises concerns about delays, disputes, or rejections. This study explores and compares the CSR performance of public and private insurers in India over a five-year period (2017–2022). Using secondary data sourced from the Insurance Regulatory and Development Authority of India (IRDAI), the research employs descriptive statistics, trend analysis, and hypothesis testing to examine differences in settlement efficiency. Findings indicate that although LIC, the sole public insurer, consistently maintains a slightly higher CSR, private insurers have demonstrated significant improvements and are rapidly narrowing the gap. Variability in performance is more pronounced among private players, with a few underperforming firms affecting overall averages. The study concludes that there is no statistically significant difference between public and private insurers’ average CSR. However, the results underline the importance of regulatory oversight, technological adoption, and customer-centric practices in ensuring fair, efficient, and timely claim settlements across the industry.