Claim Settlement Ratio: Overview
The Claim Settlement Ratio (CSR) in term insurance is the percentage of claims an insurer successfully pays out in a financial year.
A higher CSR suggests a higher chance that your family’s claim will be honoured promptly. However, just looking at the CSR isn’t enough; you should also consider other key metrics.
Introduction
Imagine paying premiums for years, only to have your family denied a claim when they need support the most. That fear is exactly why people look at one key metric before choosing a term insurance company: the claim settlement ratio. It helps you understand how reliably an insurer pays out claims when it matters.
Book a call with Ditto today to get unbiased advice on the right term plan and choose an insurer with strong claim performance.
Life Insurance Claim Settlement Ratio
IRDAI & insurers publish CSR and its raw data for the entire life insurance business, not just term plans. This includes term insurance, ULIPs, endowment plans, whole-life plans, and others. Because of this, CSR should always be interpreted as an overall indicator of an insurer’s claim-handling performance and not exclusively as a term insurance metric.
Nonetheless, you can still rely on CSR when evaluating term insurance, as these factors apply to term plans as well. So, you don’t need to be worried. CSR and other published metrics remain relevant and valid for assessing an insurer’s term insurance offerings.
Types of Life Insurance Claims
Life insurance claims generally fall into three categories
- Death Claim
Paid to the nominee when the policyholder passes away during the policy term. Note: This is the basis for CSR. - Maturity Claim
Paid to the policyholder if they survive the policy term (applicable to savings-based life insurance plans). - Rider Claim
Paid when a claim arises under an added rider, such as critical illness, accidental death, or disability, based on the specific rider’s terms.
Top Life Insurance Companies Based on Claim Settlement Ratio
Below is a ranking of the top 10 insurers based on their three-year average CSR from FY 2022 to 2025.
| Rank | Insurance Company | CSR (22-23) | CSR (23-24) | CSR (24-25) | Average (22-25) |
|---|---|---|---|---|---|
| 1. | Axis Max Life Insurance | 99.51% | 99.65% | 99.70% | 99.62% |
| 2. | Aegon Life Insurance | 99.37% | 99.66% | 99.73% | 99.59% |
| 3. | HDFC Life Insurance | 99.41% | 99.54% | 99.71% | 99.55% |
| 4. | PNB MetLife India Insurance | 99.09% | 99.20% | 99.57% | 99.29% |
| 5. | Canara HSBC Life Insurance | 99.10% | 99.31% | 99.43% | 99.28% |
| 6. | Edelweiss Tokio Life Insurance | 99.20% | 99.23% | 99.29% | 99.24% |
| 7. | Tata AIA Life Insurance | 99.03% | 99.16% | 99.43% | 99.21% |
| 8. | Bajaj Life Insurance | 99.06% | 99.26% | 99.32% | 99.21% |
| 9. | Pramerica Life Insurance | 98.80% | 99.19% | 99.45% | 99.15% |
| 10. | Aviva Life Insurance | 98.75% | 98.98% | 99.07% | 98.93% |
CSR is a valuable indicator, but it shouldn’t be the only factor when selecting an insurer. Some companies operate at a much smaller scale, making it easier to maintain exceptionally high CSRs.
Suppose you look at the top 3 life insurers in the list above. In that case, only Axis Max Life and HDFC Life have a commendable performance. They’ve performed well across all key parameters, not just CSR.
If you’d like to get the whole picture about an insurer, you should also compare:
- Amount Settlement Ratio (ASR): Shows the percentage of the total claim amount an insurer actually pays. It shows whether high and small value claims are settled equitably.
- Complaint Volume: Indicates how many customers report issues (per 10,000 claims), and lower is better.
- Solvency Ratio: Measures the insurer’s financial strength and ability to pay future claims.
- Claim Processing Time: Reflects how quickly the insurer settles claims.
- Annual Business Volume: Shows the company’s scale and stability.
- Product Variety & Rider Options: Helps assess how flexible and customizable their plans are.
To read about this in more detail, you can check out our list of Top Life Insurance Companies in the country.
What Is The Importance of CSR?
A good CSR reflects reliability, trustworthiness, and customer experience. Let’s also look at an infographic for better understanding.
How Is The Claim Settlement Ratio Calculated?
Here’s how the claim settlement ratio of an insurance company is calculated:
Claim Settlement Ratio = (Total Number of Claims Settled / Total Claims Received) × 100
Where the total number of claims approved = outstanding claims at the Beginning + claims reported during the period - claims closed - claims outstanding at the end.
Note that CSR does not reflect:
- The value of claims settled
- The reason for claim rejections
- The speed of claim processing
That’s why combining CSR with other metrics gives a more accurate picture.
Why Choose Ditto for Term Insurance?
At Ditto, we’ve assisted over 8,00,000 customers with choosing the right insurance policy. Why customers like Aaron below love us:
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Conclusion
The Claim Settlement Ratio is one of the most important parameters when choosing a term insurance provider. It shows how efficiently an insurer honors claims and how dependable they are during critical moments. However, don’t rely on CSR alone; pair it with other indicators such as ASR, complaint data, solvency ratios, and claim processing times to make a well-informed decision.
Frequently Asked Questions
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