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  • GENERAL INSURANCE CLAIM INSIGHTS FOR

    POLICYHOLDERS

    A HANDBOOK

    INSURANCE BROKERS ASSOCIATION OF INDIA

  • ABOUT THE HANDBOOK 1

    ABOUT INSURANCE BROKERS 1

    ABOUT INSURANCE BROKERS ASSOCIATION OF INDIA 1

    METHODOLOGY & DATA 2

    OVERALL INSURERS COMPARISON: SOLVENCY RATIO 4

    OVERALL INSURERS COMPARISON: CLAIMS SETTLEMENT EFFICIENCY RATIO 6

    OVERALL INSURERS COMPARISON: PENDENCY RATIO 7

    FIRE: CLAIMS SETTLEMENT EFFICIENCY RATIO 8

    FIRE: CLAIMS PENDENCY RATIO 9

    MARINE: CLAIMS SETTLEMENT EFFICIENCY RATIO 10

    MARINE: CLAIMS PENDENCY RATIO 11

    MOTOR: CLAIMS SETTLEMENT EFFICIENCY RATIO 12

    MOTOR: CLAIMS PENDENCY RATIO 13

    HEALTH: CLAIMS SETTLEMENT EFFICIENCY RATIO 14

    HEALTH: CLAIMS PENDENCY RATIO 16

    MISCELLANEOUS: CLAIMS SETTLEMENT EFFICIENCY RATIO 18

    MISCELLANEOUS: CLAIMS PENDENCY RATIO 19

    GLOSSARY 20

    DISCLAIMER 20

    CONTENTS

  • ABOUT THE HANDBOOK

    This handbook is created by Insurance Brokers Association of India (IBAI) in the interest of policyholders to provide additional data to help them make an informed decision while analyzing a general insurer.

    ABOUT INSURANCE BROKERS

    Insurance Brokers are representatives of the policyholders interests and are regulated by the IRDAI (Insurance Brokers) Regulations, 2013. Insurances brokers work for policyholders interests and are therefore, the fastest growing among distribution channels contributing to about INR 19,300 crores of gross direct premium in FY15 resulting in 23.2% of the non-life insurance premium. Insurance Broking registered the highest CAGR of 27.7% between FY10 and FY15 among the major channels in non-life insurance. As per the EY Vison 2025, brokers driving customer-centric growth report, it is expected that insurance broking will contribute close to 40% of of gross direct premium in non-life insurance in the progressive scenario. As per the report, non-life insurance market in 2025 is expected to be at Rs 4,00,000 Crs and brokers market share is likely to be around Rs 1,60,000 Crs.

    ABOUT INSURANCE BROKERS ASSOCIATION OF INDIA

    Insurance Brokers Association of India (IBAI) is the only Insurance Regulatory and Development Authority of India (IRDAI) recognized apex body of licensed Insurance Brokers. As per Insurance Brokers Regulations 2002 framed by the IRDAI, all licensed Brokers are required to be members of IBAI. As on December 31, 2016, there are 376 insurance brokers in India including Direct Insurance Brokers, Composite Insurance Brokers and Re-insurance Brokers.

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  • METHODOLOGY & DATA

    This study considers the following criteria to present analysis of claims data points of insurers through public data points till date.

    1. Solvency Ratio - The ability of an insurance company to pay the claim i.e. its financial strength.

    Higher the Solvency Ratio, better is the ability of an insurer to pay the claim

    2. Claims Settlement Efficiency Ratio % - The efficiency of an insurance company to pay the claims i.e. The number of claims that are paid within 3 months as compared to the number of total claims paid.

    Higher the claims settlement efficiency ratio, better is an insurance company in terms of the measured ratio

    3. Claims Pendency Ratio % - The number of claims that are pending for more than 1 year out of the total number of pending claims.

    Lower the claims pendency Ratio, better is an insurance company in terms of the measured ratio

    Insurers are evaluated and ranked basis the above 3 criteria both at company level and at line of business level i.e. Fire, Marine, Motor, Health and Miscellaneous.

    1. Insurer Categories: Insurers are categorized into four different categories according to the Gross Premium

    Written by them in that line of business for the year ending 31st March 2016 from the IRDAI Journal Volume XIV No. 3. For overall company ratios, the total premium written is considered.

    a. Public Sector General Insurers

    b. Private Sector General Insurers Category A: The top 10 private sector general insurers on the basis of the gross premium written by the respective insurers in that line of business for line of businesswise ratios.

    c. Private Sector Insurers Category B: The remaining private sector insurers.

    d. Standalone Health Insurers: The claims settlement efficiency ratio and claims pendency ratio has been considered for the Health line of business for the following -

    i. Apollo Munich Health Insurance ii. Max Bupa Health Insurance iii. Religare Health Insurance iv. Star Health and Allied Insurance v. Cigna TTK Health Insurance

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    2. Source of Data: a. Claims related data is taken from respective public disclosures of Insurance

    companies from their respective websites for the quarter ending June 30, 2016. These disclosures include the following - i. NL 24 (Ageing of Claims): It includes data on how claims have been paid over

    various time periods. Here, the data for Claims Paid in 0-1 month has been clubbed with the data for 1-3 months to arrive at 0 3 months data.

    ii. NL 25 (Claims Data): It includes data on ageing of outstanding claims over various time periods.

    b. For the above mentioned disclosures, the following lines of business have been clubbed together

    i. Marine: Marine Cargo & Marine Hull ii. Motor: Motor (Own Damage) & Motor (Third Party) iii. Miscellaneous: Engineering, Aviation, Liability, Credit Insurance, Personal

    Accident, Travel, Crop & Other Miscellaneous Insurance.

    c. Solvency Ratio data is sourced from NL-33 published on insurers website as on September 30, 2016.

    d. The data considered only refers to the number of claims and not claim amounts. Corresponding data on claim amounts is not available in the public domain for the Indian insurance market.

    3. Exclusions: i. L&T General Insurance The Company now has been acquired and no more

    accepting new proposals. ii. Kotak General Insurance and Aditya Birla Health Insurance: The Insurers were not

    incorporated in the period for which claims data is taken i.e. 2014-15 iii. Standalone / Specialized Insurers Following specialised insurers are not

    considered for evaluation:- 1. Agriculture Insurance Corporation of India 2. Export Credit Guarantee Corporation of India

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    Solvency Ratio as on September 30, 2016 - The ability of an insurance company to pay the claim i.e. its financial strength

    Higher the Solvency Ratio,better is the ability of an insurer to pay the claim

    OVERALL INSURERS COMPARISON: SOLVENCY RATIO

    RANK INSURER SOLVENCY RATIO %

    1 New India 2.042 United India 1.563 National 1.264 Oriental 1.14

    RANK INSURER SOLVENCY RATIO %

    1 Bajaj Allianz 2.532 Shriram General 2.073 ICICI Lombard 2.034 SBI General 2.005 Reliance General 1.816 Royal Sundaram 1.667 IFFCO Tokio 1.648 Tata AIG 1.649 Cholamandalam MS 1.64

    10 HDFC Ergo 1.52

    RANK INSURER SOLVENCY RATIO %

    1 Raheja QBE 4.442 Liberty Videocon 4.093 Magma HDI 1.994 Bharti AXA 1.805 Universal Sompo 1.566 Future Generali 1.51

    PUBLIC SECTOR GENERAL INSURERS

    PRIVATE SECTOR GENERAL INSURERS CATEGORY A

    PRIVATE SECTOR GENERAL INSURERS CATEGORY B

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    Note: The IRDAI prescribed minimum solvency ratio is 1.5 times the net written premium and net written claims at all times, according to the IRDA (Assets, Liabilities, and Solvency Margin of General Insurers) Regulations, 2000 vide circular no. 045/IRDA/F&A/Mar-06 dated March 31, 2006, applicable retrospectively from April 01, 2005.

    RANK INSURER SOLVENCY RATIO %

    1 Max Bupa 2.442 Religare Health 2.213 Cigna TTK 1.684 Apollo Munich 1.625 Star Heatlh 1.59

    STANDALONE HEALTH INSURERS

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    Claims Settlement Efficiency Ratio % for the quarter ending June 30, 2016 The efficiency of an insurance company to pay the claims i.e. The number of claims that are paid within 3 months as compared to the total number of claims paid.

    Higher the claims settlement efficiency ratio,better is an insurance company in terms of the measured ratio

    OVERALL INSURERS COMPARISON:CLAIMS SETTLEMENT EFFICIENCY RATIO

    *Please note that the above ranks have been derived on the basis of ratios calculated upto two decimal places. For the sake of simplicity, the data has been rounded off to exclude decimals. This data is based on the number of claims and not claim amounts. Data on corresponding claim amounts is not available in the Indian insurance market.

    RANK INSURER CLAIMS SETTLEMENT EFFICIENCY RATIO %

    1 United India 95%2 New India 93%3 Oriental 91%4 National 60%

    RANK INSURER CLAIMS SETTLEMENT EFFICIENCY RATIO %

    1 ICICI Lombard 97%2 Bajaj Allianz 96%3 Reliance General 96%4 Royal Sundaram 96%5 HDFC Ergo 95%6 Tata AIG 94%7 Cholamandalam MS 93%8 SBI General 87%9 IFFCO Tokio 81%

    10 Shriram General 74%

    RANK INSURER CLAIMS SETTLEMENT EFFICIENCY RATIO %

    1 Liberty Videocon 97%2 Universal Sompo 95%3 Bharti AXA 92%4 Future Generali 91%5 Magma HDI 87%6 Raheja QBE 17%

    PUBLIC SECTOR GENERAL INSURERS

    PRIVATE SECTOR GENERAL INSURERS CATEGORY A

    PRIVATE SECTOR GENERAL INSURERS CATEGORY B

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    *Please note that the above ranks have been derived on the basis of ratios calculated upto two decimal places. For the sake of simplicity, the data has been rounded off to exclude decimals. This data is based on the number of claims and not claim amounts. Data on corresponding claim amounts is not available in the Indian insurance market.

    Claims Pendency Ratio % for the quarter ending June 30, 2016 - The number of claims that