An insurance coverage contract amongst the insurance coverage firm and the insured is one particular of trust. The moment of truth in this partnership seems when there is a claim by the insured (in the case of a non life policy) or by the dependents (in the case of a life insurance coverage claim). Till that moment comes, all the things is hunky dory- premiums are becoming paid consistently by the customers, and the firm is only as well satisfied getting them. On the other hand, the moment a claim seems, an insurance coverage firm proceeds to evaluate the claim closely, as each and every claim paid out is an expense for the firm, hurting profitability. Therefore, there is a fundamental conflict right here: the insured desires the maximum claim to be paid, although the insurer would like to lower the claims outflow to the extent probable.
From a customer's point of view, it is extremely critical to study the claims settlement history of a life insurance coverage or a basic assurance firm just before deciding to obtain an insurance coverage policy from that firm. Throughout the sales procedure, the sales representatives will be all sugar and honey so that the potential buyer indicators up. But the truth of the matter is that if the insurer you are thinking about has a poor history of claims settlement, there is a higher probability that you will face a claim rejection or reduction when the time comes for you to file a claim.
We had a close appear at the claim settlement information of the a variety of Indian insurance coverage sector. This is what that information tells us:
LIFE Insurance coverage: Apr '09-Mar '10, Claims paid as a percentage of claims filed
- LIC 96.54%
- Private 84.88%
- Total 95.24%
LIFE Insurance coverage: Apr '09-Mar '10, Claims refused as a percentage of claims filed
- LIC 1.21%
- Private 7.6%
- Total 1.93%
NON LIFE Insurance coverage:Apr '09- Mar '10, Claims paid as a percentage of claims filed
For Fire insurance coverage, 81% of the claims filed have been paid by the four public sector basic insurance coverage corporations although 73% of the claims filed with the private sector corporations have been paid
For Marine insurance coverage, 76% of the claims filed have been paid by the four public sector basic insurance coverage corporations although 83% of the claims filed with the private basic insurance coverage corporations have been paid
For Motor insurance coverage, 88% of the claims filed have been paid by the four public sector basic insurance coverage corporations although 80% of the claims filed with the private basic insurance coverage corporations have been paid.
For Overall health insurance coverage as well, a greater percentage of claims have been paid by the public corporations .
The information above clearly reveals that the Indian Public sector insurance coverage corporations are extra generous in terms of paying claims. The life insurance coverage information shows that LIC pays pretty much 97% of the claims although the private Indian life insurance coverage corporations spend about 85% of the claims. The very same pattern is revealed in the non life insurance coverage sector also exactly where on an all round basis, the claims ratio of the public non life corporations is greater than that of the private corporations. On the other hand, one particular requires to be cautious right here just before jumping to a conclusion. It could extremely nicely be that in the public corporations are sourcing the incorrect type of small business with lax underwriting norms, whereas the private corporations would be extra stringent at the entry time itself. On the other hand, the worrying component is the claims denied ratio of the private life insurance coverage corporations which is more than 7%. In the case of a life firm, the claim is a death. There can be no ambiguity right here- an individual is either dead or alive. The repudiation figure of 7% appears mysteriously higher right here.