Aditya Birla Claim Settlement Ratio

Aditya Birla Claim Settlement Ratio is an index for the claims that have been settled within the time frame of one financial year. The Aditya Birla Claim Settlement Ratio for the year 2019-20 as published on 10th February 2021 is 97.54% according to the annual report of the Insurance Regulatory and Development Authority of India.

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In an explanatory tone for every 100 claims filed, the company settled 97.54 out of them, and the rest were repudiated. Though having a look at the settlement ratio does not give a full report of the company’s performance it sure is an important component.

What is the Claim Settlement Ratio?

When purchasing an insurance policy every customer makes sure to purchase it from a reliable company that has the ability to fulfil their claim when required. The Claim Settlement Ratio is considered the most suitable way to check the executive potential and claim settlement capacity of the company. The company needs to maintain the consistency of its record in order to maintain accountability. The lesser the range of difference between multiple-year ratios, the more reliable is the company. Thus, the customer is always advised to check at least past 5-year records before purchasing insurance. This system works as a guarantee for the policyholder as and when there is a need for financial backup, he will get all the possible assistance. The claim settlement ratio is the number of claims settled within a year against the total number of claims registered. A company with a higher percentage is likely to be more equipped and capable of settling claims.

Aditya Birla CSR

It is really necessary to understand the procedure to calculate the Aditya Birla Claim Settlement Ratio. In a mathematical arrangement, it means the total number of claims settled divided by the total number of claims filed. Here the total number of claims filed includes the claims filed within one financial year and the ones that have remained pending since the last year. This ratio is expressed in terms of a percentage to facilitate comparison with other companies. Hence, when simply put:

Aditya Birla Claim Settlement Ratio = Total Aditya Birla Claims Settles/ Total number of claims filed. (Claims filed within one year + previous year’s pending claims)

Here is an example of Aditya Birla Claim Settlement Ratio, from the year 2019-20. The statistics are according to IRDA’s annual report.

Aditya Birla Claim Settlement Ration for 2019-2020
Pending Claims carried Over Claims Registered Total Claims  Claims Settled Claim Settlement Ratio
24 5138 5162 5035 97.54%
Source: IRDA Annual Report 

Source: IRDA Annual Report 

Though this method is considered to be the most reliable one, it is always good to check the claim settlement amount. It informs about the insurer’s financial ability to pay the amount of the claim as mentioned. The claim settlement ratio depicts the number of claims settled. However, the amount settled gives us a broader picture to look at and analyse, which might be slightly different. 

What does Aditya Birla Claim Settlement Ratio Represent?

Here is a table presenting the past few years’ performances of Aditya Birla Claim Settlement Ratio. Let’s have a look at this:

Aditya Birla Claim Settlement Ratio based on the number count

Aditya Birla Claim Settlement Ratio based on the number count
Financial Year   Claims Registered Claims Settled Ratio in %
2015-16 7204 6372 88.45
2016-17 6048 5727 94.69
2017-18 5491 5292 96.38
2018-19 5260 5110 97.15
2019-20 5162 5035 97.54

The above index portrays the Aditya Birla Claim Settlement Ratio for individual policies. It shows the percentage of claims settled against the number of total claims registered. The following equation depicts the calculation of the Claim Settlement Ratio for the year 2019-2020:

  • Claims registered during the year (A): 5162

  • Claims settled during the year (B): 5035

The Aditya Birla Claim Settlement Ratio for the year 2019-20 = (B)/(A)*100 

= 5035/5162*100 = 97.54%

Claim Settlement Ratio is an important consideration when purchasing a life insurance policy. Consistency in the performance of the company is another factor and should be checked upon. Along with these two, a customer should also make sure to check the claim settlement ratio based on the settled amount. It depicts the company’s ability to provide financial assistance as required.

Here is a grid depicting the Claim settlement Ratio based on settled amount:

Aditya Birla Life Claim Settlement Ratio based settled amount

Aditya Birla Life Claim Settlement Ratio based settled amount
Financial Year  Total Claim Amount (Rs Crore) Claim Amount Paid (Rs Crore) Ratio in %
2015-16 277.51 215.97 77.82
2016-17 299.54 271.98 90.80
2017-18 274.17 248.16 90.51
2018-19 306.90 276 90.07
2019-20 371.05 342.89 92.41

The statistics displayed are of Individual policies, consisting of the total sum assured. The ratio is calculated by putting the total sum settled against the total sum of the amount assured. When we put in the statistics of the year 2019-20, the equation is as follows:

  • Amount of registered Claims during the year (A): Rs 371.05 Crore.

  • Amount of settled claims during the year (B): 342.89 Crore.

The Aditya Birla Claim Settlement Ratio for the year 2019-20 = (B)/(A) i.e. 342.89/371.05*100 = 92.41%

What Information do we get with Aditya Birla CSR?

Every policyholder consults the Aditya Birla Claim Settlement Ratio before purchasing financial aid, to ascertain the reliability of the company. Claim Settlement Ratio is in, no doubt, an important indicator of the company’s potential, but there are certain points to be kept in mind while referring to it:

  • It is a statistical number and does not gives an insight into the type of policy claims settled.

  • The ratio is depicted in terms of percentage.

  • The percentage depicting repudiated claims is calculated by subtracting the CSR from 100.

  • The ratio is a statistic for one financial year that is the period from the month of April to the month of March next year according to the Indian Government.

About Aditya Birla Life Insurance Company

Aditya Birla Sun Life Insurance is a collective initiative of the Aditya Birla Management Corporation Pvt. Ltd. and The Sun Life Insurance Company. Both of them have a multinational reach. They provide various plans facilitating retirement, savings, medical emergency, and child insurance plans. Being a multinational brand the company aims to achieve high standards of convenient services for its customers. 

The insurance company makes sure to provide an environment facilitating growth and multiple opportunities for its employees. With its 850+ branches and assistance of 2 lac agents across the country, the company provides a wide range of insurance products for its customers to financially secure their future. The Aditya Birla Claim Settlement Ratio gives an insight into its yearly performance and its role in aiding its customers when in need of finances.

The Final Words

The Aditya Birla Claim Settlement Ratio is an assessment of its dependability and plausibility. A high percentage speaks out conclusively presenting a positive picture about the company’s efficiency in settling claims. A low ratio when juxtaposed delineates a threat to the financial safety of the customer during the time of need. CSR is an important facet that needs to be contemplated along with other factors while purchasing an insurance policy.

FAQ's

  • Who is responsible for the tabulation of the Aditya Birla Claim Settlement Ratio?

    A1. The Insurance Regulatory and Development Authority of India also known as the IRDA is the responsible authority to calculate The Claim Settlement Ratio of all private and public sector insurance companies of the country. 
  • What is the time frame for considering the Aditya Birla Claim Settlement Ratio?

    A2. The results of the Aditya Birla Claim Settlement Ratio are calculated through the data accumulated during the period of One Financial Year, which in India starts from the month of April and comes to an end next year in the month of March. 
  • How many insurers operate in India for comparison with the Aditya Birla Claim Settlement Ratio?

    A3. As per the Annual report of IRDA 2019-20, the Indian market consists of 58 registered public and private sector insurance companies, out of which there are 23 life insurers in comparison with the Aditya Birla Claim Settlement Ratio. 
  • How are insurance penetration and density measured in India?

    A4. The Insurance penetration is measured in premium percentage to the GDP of the country, while the insurance density is the proportion of the premium against the total population. 
  • How does the size impact the Aditya Birla Claim Settlement Ratio?

    A5. An insurance company with a plethora of customers and vast reach faces various challenges in maintaining consistency of its claim settlement ratio. When done so efficiently, it is a determinant for the company’s positive performance.

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