Evaluating Motor Insurance Performance: Key Metrics to Consider

Choosing motor insurance involves more than just comparing premiums. Key metrics like the Claims Settlement Ratio and Claims Disposal Ratio, as reported by the Insurance Regulatory and Development Authority of India (IRDAI), provide critical insights into an insurer's reliability and efficiency. Understanding these ratios helps consumers make informed decisions.

Choosing motor insurance isn't just about finding the cheapest premium; it's about ensuring peace of mind knowing your insurer will be there when you need them most. Critical metrics, such as the Claims Settlement Ratio and Claims Disposal Ratio, offer valuable insights into how effectively insurance companies handle claims, data derived from the Insurance Regulatory and Development Authority of India (IRDAI). For the period from April 1, 2023, to March 31, 2024, Royal Sundaram, ICICI Lombard, Bajaj Allianz, HDFC Ergo, Chola MS, Tata AIG, Go Digit, Acko, and SBI have demonstrated varying performance levels.

The Claims Settlement Ratio measures the percentage of claims an insurer pays out in a year. It's calculated by dividing the total claims settled by the total claims available for processing, including both unresolved claims from the previous year and new claims registered. A high ratio reflects the insurer's reliability.

The Claims Disposal Ratio, on the other hand, assesses the speed and efficiency of claims processing, combining settled, denied, and closed claims. A high disposal ratio indicates proactive and efficient handling of claims, ensuring quicker resolutions.

Understanding these metrics goes beyond financial assessment; it ensures peace of mind. When customers are aware of an insurer's performance in handling claims, they can make more informed choices. High settlement ratios signify likely honour claims, while high disposal ratios indicate efficiency. This knowledge helps consumers prioritize insurers who consistently show strong performance in both areas, ensuring financial security and efficient claims handling.

(With inputs from agencies.)