The claim settlement ratio (CSR) of the insurance company is one of the most important factors to be considered when investing in an insurance product. A good CSR is an assurance of your claim being honoured in the time of your need.
What is the claim settlement ratio?
Simply put, the claim settlement ratio is the percentage of claims that an insurance company settles against the number of claims it has received. Every year, insurance companies declare their claim settlement ratio. This ratio is calculated annually based on the number of claims received and settled during a particular fiscal year. This is inclusive of life insurance claims as well as other insurance products such as the claim settlement ratio of travel insurance and health insurance claim settlement ratio.
You can find the CSR of all the registered insured companies on the official website of the Insurance Regulatory and Development Authority of India (IRDAI).
What does the claim settlement ratio show?
The claim settlement ratio shows the credibility of the insurance company. The higher the CSR, the higher the credibility of the insurance company. It means a higher chance of your claim being settled without any hassles. There is no point in investing in an insurance product if you cannot trust your insurer to support you when you need to utilise your policy. A trustworthy insurer honours your claim if you have done everything on your part honestly. You must choose an insurer with a credible track record of settling the claims of its policyholders.