LIC settlement rate higher than peers’

Mumbai: LIC had a claim settlement ratio of 98.5% as of March 31, 2023, according to data released by the Insurance Regulatory and Development Authority in its annual report. The ratio showed a slight decrease from the 98.7% reported a year earlier. In contrast, private sector counterparts had a claim settlement ratio of about 98% — slightly down from previous year’s 98.1%.For group life insurance business in fiscal 2022-23, out of a total of 12.5 lakh claims, life insurance companies settled 12.4 lakh — achieving a settlement ratio of 99.4%. Notably, LIC settled almost 99% of group claims, while private life insurers surpassed with a ratio of 99.4%. Surrenders/withdrawals increased by 25.6%, reaching almost 2 lakh crore during the same period, with LIC accounting for 56.3%. The overall benefits paid by the life insurance industry in 2022-23 amounted to about Rs 5 lakh crore, constituting 64% of the net premium.Regarding individual life insurance business for the year 2022-23, of the total 10.8 lakh death claims, life insurance companies settled 10.6 lakh — disbursing a total benefit amount of Rs 28,611 crore. Notably, 10,822 claims were repudiated, amounting to Rs 1,026 crore, while 4,340 claims were rejected, totalling Rs 24 crore. As of the end of the year, 833 claims amounting to Rs 350 crore were pending.During 2022-23, life insurers issued 284.7 lakh new policies under individual business, of which LIC issued 204.3 lakh policies (71.8%), and private life insurers issued 80.4 lakh policies (28.3%). Private sector insurers registered 8.8% growth, while LIC registered 5.9% decline, and the industry registered a decline of 2.2% in number of new policies issued against the year before.
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