New India Assurance tops in claims settlement ratio

TNN

Mumbai:

New India Assurance

,

Royal Sundaram

and

Universal Sompo

have among the highest claims settlement ratios in the non-life industry. The ratio represents the number of claims settled during a period out of the total claims intimated and is an important indicator of customer service.

According to a report prepared by the

Insurance

Brokers Association of India (IBAI), the settlement efficiency is not skewed towards any particular segment of the industry. Each of the three segments — public, large private and small private — have leaders and laggards. The IBAI has published a handbook measuring efficiency parameters for non-life companies as of September 2016 to enable customers to take informed decisions while choosing companies.

In the public sector, New India Assurance is miles ahead of its peers with a

claims settlement ratio

of 71%, while its closest peer United India has a 55.4% ratio. The other two companies — Oriental and National Insurance — have ratios of 46.7% and 45.4% respectively.

Meanwhile, publicly declared data show that two public sector insurers — Oriental Insurance and United India Insurance — have their solvency margins below statutory prescriptions. Solvency margins are the minimum capital requirement prescribed by the regulator. United India Insurance has a solvency margin of 1.15% as of March 2017, and Oriental Insurance has a solvency margin of 1.18% as on June 30.According to IBAI president Sanjay Kedia, companies with a high component of cashless component in motor and health will have better ratios as their claims are settled immediately after assessment by third-party administrators or affiliated garages. However, all available data are based on number of claims as there is no public information available on the value of claims.

Kedia added that the insurance regulator has now allowed brokers to represent companies for recovery of even large claims, which have a value of Rs 1 crore up to Rs 10 crore. Earlier, brokers were allowed to represent companies only for claims up to Rs 1 crore.

Public sector insurer New India Assurance has fared very well when it comes to the claims repudiation ratio as well, with only 1.2% rejected. Among the large private sector insurers, Iffco Tokio has the lowest level of repudiation at 0.05%, while Raheja QBE has not rejected any claims among the small insurers. Oriental Insurance has the largest number of claims repudiated with a ratio of 4.26%.

In the private sector, ICICI Lombard has a high level of repudiation at 7.8%. According to the company, this is because of its advanced fraud detection system that helps weed out a large number of fraudulent claims.


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