Thread by @FincademyIn

Which insurance company is best to choose after doing proper research on that insurance policy ?

🧵👇 A Thread 🧵👇

1/ Buying an insurance policy is the toughest job as there are many jargons & exclusions are used into it. But, after doing proper research on that insurance policy, you have found that you will buy that plan. Now, the question arises, which insurance company is best to opt for ?

Following is the parameters to check while buying policy from the insurance company :-

2/ Claim Settlement Ratio - The claim settlement ratio of an insurance company is the no. of claims settled against the no. of claims filed by the policyholders. Also, their amounts too. Higher the ratio, the better it is.

3/ Example, HDFC has 99.07% claim settlement ratio, it means HDFC had a total 100 claims available to be paid this year, out of it, they have paid only 99 claims during the year.

4/ Claim Settlement Efficiency Ratio - The efficiency of an insurance company is to settle the claims, i.e., the number of claims settled in 3 months as compared to the total number of claims available for processing. Higher the ratio, better it is.

5/ Suppose, SBI has 92% Claim Settlement Efficiency Ratio, it means SBI had a total of 100 available claims in a given year, out of which, 92 of them were paid out within 3 months of receiving it.

6/ Claim Repudiated Ratio - It tells about how much claim has been booked by the policyholder, but rejected by the insurance company. Lower the ratio, better it is.

7/ Claim Outstanding Ratio - It means the number of claims that were outstanding out of the total number of claims received by the policyholder. Lower the ratio, better it is.

8/ For example, Apollo gets 100 claims from the policyholder in a given year, out of which they have paid 89 claims. The remaining claims i.e., 11 are kept as hanged during the year.

9/ Claim Pendency Ratio - The number of claims that are pending for more than 1 year out of the total number of claims available for processing. Lower the ratio, better it is. It’s like an extreme version of hanging you for getting the claim.

10/ UNPOPULAR FACT - Some insurance companies pay fixed amounts of interest to their policyholders if they don't delay the claim within those days. This is a good point to check in any insurance company.

11/ Solvency Ratio - It measures the extent to which assets cover expected future payments (i. e., claims). According to IRDAI, insurance companies are required to maintain a solvency minimum of 1.5 at all times. Lower than 1.5 times, it is not considered as a good sign.

As you have understood the parameter to select the best insurer. We also have a compilation of data on each parameter for all insurers.

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