Where can i check solvency ratio of an insurance company


#1

Are solvency ratios important? Where can i check solvency ratio of an insurance
company?


#2

Solvency ratios are available in the annual report published on the IRDA website. As per IRDA guidelines each life insurance company should maintain a solvency ratio of 1.5% of higher. The higher the solvency ratio, the more financially sound is the insurance company.


#3

Hi Reba,

Solvency ratio will tell you how financially sound an insurance company is. Along with this, you should look at the claim settlement ratio of the company. This ratio implies the percentage of claims honoured by the insurer. For example, if the insurer has honoured 90 claims out of 100 in a year, its CSR will be 90%. The higher the ratio, the better for you.

Claim Settlement Ratio (CSR) is calculated as follows: Number of claims settled / number of claims received. For example, an insurance company receives 10 claims. Out of these, 7 are settled. Therefore, the CSR is 70%.

The rest of the claims are, of course, rejected due to a number of reasons. So, the insurance company that settles higher claims will be preferred for obvious reasons. Every year the Insurance Regulatory and Development Authority (IRDA) of India releases an annual report on the insurance industry. This report has several details on the performance of all Insurance companies in India, the industry average, claims data, solvency ratio and many other important statistics.

There are many insurers whose claim settlement ratio is more than 95%. This is a good benchmark for choosing the right insurance provider.

As per the latest data from the Insurance Regulatory Development Authority (IRDA), Max Life has the highest claim settlement ratio of 96.95%. Other insurers with a high claim settlement ratio include ICICI prudential, which has a ratio of 96.20% and Aegon with a ratio of 95.31%. Even though it is good to check the claim settlement ratio, don’t forget to compare across insurers for the best premium and features.

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Cheers,
BB Expert