When choosing life insurance, ensuring your insurer efficiently handles claims and meets your family's financial needs is crucial. Follow these steps:
- Research top term providers,
- Select suitable term insurance plans,
- Determine optimal coverage,
- Meet eligibility criteria, and
- Customise with riders.
Today, we compare TATA AIA Life Insurance and ICICI Prudential Life Insurance to decide which offers better term insurance options based on factors like Claim Settlement Ratio (CSR), Amount Settlement Ratio (ASR), complaints volume, and business volume.
HDFC Life vs ICICI Prudential
| ASPECTS | ICICI Prudential | HDFC Life |
|---|---|---|
| Claim Settlement Ratio (CSR) | 97.09% | 98.69% |
| Amount Settlement Ratio (ASR) | 92.1 | 87.3 |
| Volume of Complaints | 14.3 | 2.7 |
| Average Annual Business (in ₹ crores) | ₹15,380 crores | ₹24,315 crores |
| Major Term Insurance Plans | iProtect Smart | Click2Protect Life Click2Protect Super |
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HDFC Life vs ICICI Prudential: Which is Better as a Term Insurance Provider in India?
HDFC Life Insurance, which began operations in 2000, now boasts an average annual business volume of ₹24,315 crores. As one of India's leading private insurance companies, HDFC Life has established strong credibility, making its financial products highly popular in the market.
HDFC Life offers a variety of products, including group policies, ULIPs, retirement policies, savings plans, and term insurance policies. The insurer prides itself on operational proficiency, featuring an industry-high Claim Settlement Ratio, the lowest complaint volume, and an excellent Amount Settlement Ratio. While their plans are slightly more expensive compared to others in the same class, the comprehensiveness of their policies more than compensates for this drawback.
ICICI Prudential Life Insurance, established in 2000 as a joint venture between ICICI Bank and Prudential Plc., ranks among India's top 3 private life insurers. With an annual business volume of ₹15,380 crores, it offers a variety of financial products, including savings plans, retirement policies, ULIPs, and its acclaimed iProtect Smart term insurance plan. Known for affordability and comprehensive coverage, ICICI Prudential is recognised for its extensive track record, credibility, and association with one of India's largest private banks.
With a quick overview of the track records of HDFC Life and ICICI Prudential Life Insurance completed, let’s examine the metrics used to compare the credibility of these two insurers. We will focus on the Claim Settlement Ratio (CSR), Amount Settlement Ratio (ASR), volume of complaints, average annual business, and the quality of their best products.
(Note: The data presented here reflects an average of the numbers from the last three years, compared to the industry average, to provide a thorough assessment of overall operational proficiency.)
Claim Settlement Ratio (CSR)
When seeking a top-notch term insurance plan, the first step is to examine the insurer's claim settlement track record, known as the Claim Settlement Ratio (CSR). This is calculated as:
CSR = (Total number of claims settled by the insurer in the year/Total number of claims raised to the insurer in a year) × 100
If an insurer has a CSR of 97% or higher, consider evaluating its other metrics, which we will discuss in detail below, before making a final decision. However, if the CSR is below 80%, it is advisable to look for other insurers.
| CSR across the years | ICICI Prudential | HDFC Life | Industry Average/year |
|---|---|---|---|
| 2020 - 2021 | 97.90% | 98.01% | 97.49% |
| 2021 - 2022 | 97.82% | 98.66% | 97.50% |
| 2022 - 2023 | 95.54% | 99.41% | 98.34% |
| Average of 3 years | 97.09% | 98.69% | 97.74% |
CONCLUSION: HDFC Life is the clear winner in the case of CSR. Now, both life insurers have cleared the 97 mark; however, in the case of ICICI Prudential, the numbers are steadily dipping, which should be a sign of concern for its existing policyholders.
Amount Settlement Ratio (ASR)
The second metric used to assess a life insurer’s credibility is its Amount Settlement Ratio (ASR). This is calculated as:
(The total amount used in settling claims by an insurer over a year / The total amount collected via premiums by the insurer over the year) * 100
The ASR is crucial for analysing the financial sustainability of a term insurance provider. Term insurance policies are long-term financial commitments between the insurer and the insured, so policyholders should seek insurers with the financial strength to pay out death benefit claims over time. An ASR of 90% or higher indicates a robust and reliable life insurance provider.
| ASR across the years | ICICI Prudential | HDFC Life | Industry Average/year |
|---|---|---|---|
| 2019 - 2020 | 91.6 | 92.6 | 90.80% |
| 2020 - 2021 | 89.2 | 80.1 | 91.20% |
| 2021 - 2022 | 95.5 | 89.4 | 90.60% |
| Average of 3 years | 92.1 | 87.3 | 90.90% |
CONCLUSION: ICICI Prudential takes the win here by a wide margin. The insurer’s numbers across ASR seem to be improving. On the other hand, HDFC Life Insurance Company’s numbers have remained quite consistent, although we would definitely want to see some significant improvement in these numbers so that they stay above 90 over the years.
Volume of Complaints
When choosing a long-term financial product like a term insurance plan to secure your family’s future, it's essential to select an insurer with a stellar operational record. One key metric to consider is the insurer's complaint volume, which reflects the claim settlement experience of existing policyholders. A lower complaint volume indicates better overall operational proficiency and enhances the insurer's credibility.
| Complaint Volume across the years | ICICI Prudential | HDFC Life | Industry Average/year |
|---|---|---|---|
| 2020 - 2021 | 10 | 3 | 67.6 |
| 2021 - 2022 | 17 | 3 | 76.5 |
| 2022 - 2023 | 16 | 2 | 65.3 |
| Average of 3 years | 14.3 | 2.7 | 72.8 |
CONCLUSION: HDFC Life has one of the lowest complaint volumes across the industry and clearly takes the win here. On the other hand, the numbers for ICICI Prudential are alarming. Considering how ICICI Pru is considered among the top life insurance companies, such numbers are completely unacceptable. The insurer definitely needs to work on its overall operational efficiency.
Average Annual Business
While the average annual business volume of a term insurance provider isn't a direct metric for gauging credibility, it can offer insights into the provider's track record. Reviewing these numbers helps determine whether the insurer is a small, medium, or large-sized brand. This information allows you to make an informed decision about whether to approach this life insurance provider.
Average Annual Business across the Years ICICI Prudential (in crores) HDFC Life (in crores) Industry Average/year (in crores) 2020 - 2021 ₹13,226.1 ₹20,106.6 ₹12,265.5 2021 - 2022 ₹15,502.3 ₹24,154.8 ₹13,873.8 2022 - 2023 ₹17,412.5 ₹28,683.1 ₹17,182.0 Average (2020 - 2023) ₹15,380 ₹24,315 ₹14,204CONCLUSION: HDFC Life is definitely reflecting a wider client base with a greater volume of business as compared to ICICI Prudential. Again, if you take a look at the industry average, you will see the average business volume for ICICI Prudential is pretty close to those numbers. If you consider ICICI Pru to be one of India's best term insurance providers, these numbers should be plenty revealing.
Comparison of ICICI and HDFC Term Insurance Plans
| Term Insurance Providers | Best Term Insurance Plans | Pros/Cons |
|---|---|---|
| ICICI Prudential | iProtect Smart | Pros: The policy has 4 variants based on the death benefit payout options - Lump sum, Income, Lump sum plus income, and Increasing Income. Riders: Waiver of Premium + Terminal Illness Benefit, Waiver of Premium due to Disability, Accidental Death Benefit, and Critical Illness Benefit There are 4 plan options - Life, Life Plus, Life and Health, and All In One. Cons Lack of options in term insurance plans |
| HDFC Life | Click2Protect Life | Pros Income Benefit on Accidental Disability Rider Coverage option of ₹25 lakhs to ₹2 crores Critical Illness (CI) Plus Rider Protect Plus Rider Return of Premium (ROP) Waiver of Premium on CI Accidental Death Benefit (ADB) Alteration of premium payment frequency Option to change the Premium Payment Term from Regular Pay to Limited Pay Cons Maximum coverage is capped at ₹2 crores A bit expensive. |
| Click2Protect Super | Pros Waiver of Premium on Critical Illness Return of Premium Waiver of Premium on Total and Permanent Disability Spouse Cover Option Option to alter premium frequency Option to change Premium Payment Term from regular pay to limited pay Renewability Option at Maturity Life Stage Option Death benefit as an instalment option Cons A bit expensive. |
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HDFC Life vs ICICI Prudential: What Should You Choose?
If you have observed the comparison of HDFC Life vs ICICI Prudential Life Insurance closely, you must have noticed - HDFC Life tends to take the win almost every time. Moreover, the variety of term insurance plans offered by HDFC Life is pretty diverse, while in the case of ICICI Prudential, there is a single-term insurance policy. This limits your choices when purchasing a term insurance plan. Moreover, the complaint volume numbers for ICICI Prudential Life Insurance is a red flag that forces us to lean towards HDFC Life Insurance Company for our term plans.
