LIC lags private insurers in claims settlement

The Insurance Regulatory and Development Authority of India in its annual report 2013-14 has declared that Life Insurance Corporation of India has outshined its private peers in settling death claims “The claims settlement ratio of LIC was better than that of the private life insurers,” according to the regulator 

 

LIC’s individual death claims settlement ratio increased to 98.14 per cent during the last year against 97.73  per cent in 2012-13. For private insurers, the settlement ratio had gone down marginally to 88.31 per cent, compared with 88.65 per cent during the previous fiscal. Further to the development the regulator said private sector life insurers have been rejecting about 8.03 per cent of the claims as against 1.10 per cent by LIC. “Private insurers had repudiated more (10,036) number of claims when compared to (8.387) of LIC,” the report said.  

 

As far as the industry performance is concerned the industry’s settlement ratio had slightly increased to 96.75 per cent in 2013-14 from 96.41 per cent in 2012-13 and the  repudiation ratio had remained almost at the same level of 2.08 per cent in 2013-14. 

 

The private life insurers closed 732 offices and opened 166 whereas on the other hand, LIC established 1313 new offices and closed none which resulted in a net increase of 1313 offices in the public sector. 

 

Not only this in order to push financial inclusion LIC opened a number of micro offices during the reporting year as mandated by the previous UPA Government. 

 

At present LIC has more number of individual agents than all private life insurers put together .The industry saw a 3.1 per cent growth in the number of individual agents during 2013-14 with  the private life insurers recording  an increase of 4.5 per cent and  LIC an increase of 2 per cent. 

 

At the end of 2013-14, the number of agents with LIC stood at 11.96 lakh, while the corresponding number for private sector insurers was 9.92 lakh.