The Insurance Brokers Association of India (IBAI) has released a report revealing that the claim-to-settlement ratio for general insurance in 2022-23 was 86%, down from 87% in the previous year. The report highlights that not all claims are honored, with a claim-repudiation ratio of 6% for general insurance, which includes motor, health, fire, and marine cargo. Public sector insurer New India Assurance has the lowest claims repudiation ratio of 0.2%, while private insurers HDFC Ergo, Future Generali, Aditya Birla Health, and Shriram also have lower rejection rates.
The report breaks down the general insurers into four categories, including public sector, large private sector, other private sector, and standalone health insurers. New India Assurance is also the top performer in the health insurance category, with a claim-settlement ratio of 95%. However, experts note that the data for individual health insurance policies is not available separately, making it difficult for policyholders to make informed decisions.
The report also highlights the issue of incomplete or false disclosure at the time of policy purchase, which can lead to claim rejection. Additionally, the article discusses the low insurance penetration in India, with a coverage ratio of 30% compared to over 90% in developed countries like the US. The high 18% Goods and Services Tax (GST) on insurance premiums is also criticized, leading to people settling for smaller covers due to high premiums.
Experts suggest that the insurance industry needs several reforms, including reduced tax and segregated data on claim-settlement ratios for individual and group policies, to promote growth and provide better coverage for people. The report’s findings provide a benchmark for policyholders to make informed choices when selecting insurers and purchasing policies.