Private individual insurers Tata AIA and HDFC Life have shown significant growth in claim settlements, surpassing the country’s largest insurer, Life Insurance Corporation of India (LIC). The claim settlement ratio of both the life insurance firms grew over to 99 per cent during the financial year 2018-19, while that of the publicly held firm remained at 97.79 per cent, according to latest data released by Insurance Regulatory and Development Authority of India (IRDAI).
IRDAI’s annual report for FY 2018-19 states that the settlement ratio of private insurers had increased to 96.4 per cent from 95.24 per cent a year ago. During the year, the life insurance companies had paid 8.43 lakh claims on individual life insurance with total payout of Rs 17,365.30 crore.
The data also shows that Tata AIA has the claim settlement ratio (as per the number of policies) at 99.07 per cent, followed by HDFC Life at 99.04 per cent. There were other private insurance firms, such as Max Life and ICICI Prudential Life with 98.74 per cent and 98.58 per cent respectively, which stayed ahead of the LIC. The claims ratio (as per the benefit amount) for the LIC is 95.32 per cent, that of HDFC Life 91.97 per cent, ICICI Prudential Life’s at 92.47 per cent, Max Life’s at 94.33 per cent and Tata AIA’s at 96.12 per cent.
Life insurance as a financial asset class is slowly being understood properly and IRDAI’s annual report amply reflects growing influence of the sector on the economy. “The claims data is one of the many good indicators or an important parameter for any individual to arrive at a good decision on which company to buy life Insurance from,” said a senior officer of a leading private life insurance firm.
Life insurance sector has recorded a premium income of Rs 5,08,132 crore during FY 2018-19, as against Rs 4,58,809.44 crore in previous financial year, registering 10.75 per growth year-on-year. The premium income of private insurers grew by 21.37 per cent, as compared to 19.15 per cent the previous year.
During FY 2018-19, life insurers issued 286.48 lakh new individual policies, out of which private life insurers issued 72,440 lakh policies. Private life insurers achieved a growth of 5.61 per cent YoY in the number of policies issued. The market share of private insurers in new business premium was 33.80 per cent in FY 2018-19, up from 30.64 per cent a year ago.
Despite the reported slowdown in the economy, life insurance as a sector is doing quite well, with three firms — SBI Life, HDFC Life and ICICI Prudential Life — already listed and the other two, Max Life and Bajaj Life, listing their holding companies. “So, the life insurance as a sector is under public eye. There is a lot of policyholder and investor interest in the segment and even more so, regulatory scanner too. Hence, media too closely follows this fine sunrise sector,” said the officer quoted above.
In life insurance business, India ranked tenth among 88 countries, as per Swiss Re. India’s share in global insurance market was 1.92 per cent in 2018. Compared to global data, total insurance premium in India increased by 9.3 per cent, whereas global growth was 1.5 per cent.
West Bengal women lead the insurance market
Interestingly, it has been observed the women from states such as West Bengal, Uttar Pradesh and Maharashtra are becoming more conscious of life insurance. The IRDAI data shows that out of the 103 lakh policies bought by women, more than one-third have come from states: West Bengal (16.51%), UP (10.53%) and Maharashtra (10.16%). Of the Rs 36,525 crore first-year premium contributed by women, slightly more than one-third have come from these states: Maharashtra (15.74%), West Bengal (10.05%) and UP (9.55%).