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ICICI Prudential Claim Settlement Ratio

When one thinks of buying life insurance, one of the first things they check is the claim settlement ratio of that insurance product. The reason this ratio is so important is that it gives an indication of how the insurer honours its promises to the customers. IRDA releases this data annually in its IRDA Annual report. This report gives all insurers’ ratios including the ICICI Prudential Claim Settlement Ratio.

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For example, the ICICI Prudential Claim Settlement Ratio for the year 2019-2020 was 97.8%. It means that for every hundred claims made by claimants, 97.8 people on average were paid out. This also implies that the rest of the claims stood repudiated. This gives a person a fair idea of the consistency of the provider. However, it is important to look at this ratio in detail to get a better idea of the provider and the policies in their entirety. 

What is the Claim Settlement Ratio?

As explained before, a claim settlement ratio is the ratio of settled claims in relation to total claims. This exists for all the wide variety of products that the provider offers. To understand why a claim settlement ratio is important, it is important to have a look at the reason people buying life insurance

A person generally purchases life insurance so that if they were to die, they would still leave behind a cover for their loved ones. Thus, in the unfortunate event of the demise of a policyholder, the beneficiaries need to claim the insurance from the provider. At that point, the last thing they want is to have their claim repudiated. 

This will leave them in the deep-end and all the premiums paid thus far would go to waste. So that such a scenario does not arise, before purchasing from ICICI Prudential Life Insurance Company, it is important to look at the ICICI Prudential Claim Settlement Ratio. 

ICICI Prudential CSR

Before moving on to reporting the Claim Settlement Ratios for the various years, it is important to mathematically state what the ICICI Prudential Claim Settlement Ratio is. As mentioned before, it is a ratio of settled claim upon total claims. Generally, it is expressed in percentage to give a whole number on rounding off, instead of a fraction since that can be difficult to compare. The simplest way to express it in percentage is:

  • ICICI Prudential Claim Settlement Ratio

Total Claims that ICICI Prudential Settles / Total Claim that ICICI Prudential receives

(Note 1: To get the figure in percentage terms, multiply the above ratio by 100)

(Note 2: The ratio is calculated every financial year)

Since the ICICI Prudential Claim Settlement Ratio is reported each financial year, this article includes a yearly report later. The most recent ratio is given below for the financial year 2019-2020.

ICICI Prudential Claim Settlement Ratio for 2019-2020
Total Claims Claims Paid Claim Settlement Ratio Claims Repudiated Claim Repudiation Ratio
11460 11212 97.84% 153 1.34%
Source: IRDA Annual Report 

Thus, one can see that the provider accepted most of the settlement claims. They received 11460 claims. They paid our 11212 at a ratio of 97.84% and repudiated 153 at a ratio of 1.34%. The balance 95 would then be carried forward to the next financial year. 

What does ICICI Prudential Claim Settlement Ratio Represent?

While it is good to look at the ICICI Prudential Claim Settlement Ratio in isolation for the most recent year, a better way to look at it is to look at the trend for the previous years. While the ratio for a year gives proof of the current state of the provider, the ratio over the years gives proof of reliability. Claim settlement ratios from the year 2009-10 follow in the given table:

Financial Year  Ratio in %
2009-10 90.17
2010-11 94.61
2011-12 96.53
2012-13 96.29
2013-14 94.10
2014-15 93.80
2015-16 96.20
2016-17 96.68
2017-18 97.88
2018-19 98.60
2019-20 97.84

The ratios above point to an interesting picture. It shows that at the beginning of the decade, the ratio was just above 90%. Since then, by the middle of the decade, it had breached the 94% mark, going above 96% a couple of times. While it encountered a very slight dip to fall just below 94% in 2014-15, it rebounded the next year. Since then, the ICICI Claim Settlement Ratio has been always above 96%. In the last three years, it has been above 97% in all cases and closes to 98% most of the time. 2018-2019 was the best year where it topped 98% for the first time. 

What Information do we get with ICICI Prudential CSR?

On checking the ICICI Prudential Claim Settlement Ratio, one can find the level of settled claims the provider gives. It shows how much the provider intends to honour the terms of its policy by settling claims against the premiums paid. While the ICICI Prudential Claim Settlement Ratio is a good indicator, one must be careful to note what it denotes and what it does not. Some pointers follow:

  • Unless otherwise mentioned, the ICICI Prudential Claim Settlement Ratio includes all the settlements of all different types of insurance that it offers. 

  • The ratio is given in percentage terms for easy comparison.

  • The repudiation and carry-over, taken together with the settled claims, should add up to the total claims.

  • The ratios given are always for a particular financial year, which runs from April of one year to the March of next year in India.

About ICICI Prudential Insurance

ICICI Prudential Life Insurance is a joint venture between ICICI Bank of India and Prudential plc of Great Britain. They began operations in 2001 and by 2016, they had become the first insurance company with a listing in the stock market. They crossed INR 2 trillion in Assets Under Management (AUM) in 2020. ICICI Prudential Insurance offers a wide variety of insurance in its portfolio. They include a savings plan, ULIP plan, term insurance, and retirement plans. It has received many awards for its performances over the years. It remains one of the best claim settlement ratios in the market. The subsequent sections will further discuss the ICICI Prudential Claim Settlement Ratio

Wrapping it up

The ICICI Prudential Claim Settlement Ratio measures the credibility of the provider in honouring their promises to the claimants. As a thumb rule, the higher the ratio, the higher the reliability of the provider. Conversely, a low ratio indicates the provider does not always follow through on their promises. Hence, any prospective policyholder should have a good look at the CSR prior to purchasing a policy.

FAQ's

  • What is the claims process for ICICI Prudential?

    A1. The claims process is extremely simple and involves three steps:
    • Report it online, helpline, SMS, email or physically at the central office or any of the branches.
    • ICICI Prudential team initiates quick processing.
    • The team assesses all documents and accordingly processes the settlement.
  • How fast is the claims process for ICICI Prudential?

    A2. For the financial year 2019-20:
    • 79% claims settled within 3 days and nearly all settled within 30 days.
    • The average time for settlement is a mere 2.34 days.
  • How is the claims’ paying ability of ICICI Prudential rated?

    A3. The rating comes from the ICRA rating agency. Since 2011, ICICI Prudential has always scored an iAAA rating. 
  • What are some of the necessary documents for ICICI Prudential?

    A4. The necessary documents include originals and photocopies notarized by an approved officer. This includes policy documents and KYC documents. 
  • What leads to a repudiation of a claim by ICICI Prudential?

    A5. The major reasons for repudiation, non-disclosure of facts or misstatement of facts.

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