Claim Settlement Ratios: What Every Insurer’s Numbers Actually Mean

Every year around this time, insurance agents and comparison websites trot out claim settlement ratios. “99% CSR!” the ads shout. And technically, they’re right. By count, most life insurers in India settle over 98% of death claims.

But that number answers the wrong question. You don’t want to know how many claims get paid. You want to know how much money gets paid. Those are two very different things, and the gap between them tells a story that the headline number buries.

We pulled every insurer’s individual death claim data from the IRDAI Handbook (2024-25 edition), calculated both CSR metrics, and ranked them by the one that actually matters: CSR by amount. Here’s what came out.

What CSR by count hides

There are two ways to measure claim settlement. CSR by count takes the number of claims paid and divides it by total claims decided. CSR by amount does the same calculation with rupee values instead of headcounts.

Here’s a worked example to show why the difference matters. Say an insurer decides 100 claims in a year. It pays 99 claims of ₹5,000 each and denies 1 claim of ₹50 lakh. CSR by count: 99%. Sounds excellent. CSR by amount: the insurer paid out ₹4.95 lakh and denied ₹50 lakh. That’s 9.1% by amount. Not so excellent.

This is an extreme example, but the principle holds across the industry. Denied claims tend to be larger than paid claims. Count-based CSR treats a ₹5,000 endowment maturity payout and a ₹1 crore term insurance claim as identical data points. They’re not.

The 2024-25 industry picture

In FY 2024-25, the life insurance industry settled 10,11,880 individual death claims worth ₹33,697 crore. It denied 17,333 claims worth ₹976 crore. That gives us an industry CSR of 98.32% by count and 97.18% by amount.

The 1.1 percentage point gap is the industry average. It’s been narrowing since COVID, when the gap hit 2.2 percentage points in 2020-21. Larger claim volumes during the pandemic, particularly on term policies, widened the split. Since then, the gap has been shrinking year over year.

The 2022-23 blip (gap widening back to 2.1pp) coincided with post-COVID claim spikes as insurers processed a backlog of contested claims. Since then, the trend has been steadily downward.

Every insurer, ranked by what they actually pay

This table covers the 17 life insurers that settled 1,000 or more individual death claims in FY 2024-25, sorted by CSR by amount (descending). The “Avg Denied” column shows the average value of each rejected claim in lakh.

A few things stand out. LIC settles 8,64,109 claims a year; the next largest (SBI Life) handles 44,729. LIC’s average denied claim is just ₹3.8 lakh because most of its portfolio is traditional endowment and whole life policies with smaller sums assured. Private insurers selling more term insurance have much higher average claim values, both paid and denied.

At the bottom, three insurers sit below 94% by amount. Bajaj Allianz, Reliance Life, and Shriram Life all have gaps of 5.5 percentage points or more. If you’re shopping for term insurance with a ₹50 lakh or ₹1 crore sum assured, these gaps matter more than the count-based headline.

A note on small insurers: Aegon/Bandhan Life reported 99.80% CSR by amount, but settled only 365 claims. Aviva Life, Edelweiss Life, and Pramerica Life also had fewer than 1,000 settled claims. They’re excluded from the main ranking because small sample sizes make the numbers unreliable, but their performance was generally strong.

Three patterns hiding in the data

Bajaj Allianz: five years of the same gap

The gap between Bajaj Allianz’s count and amount CSR isn’t a one-off bad year. It’s been there consistently for half a decade.

The count-based CSR has actually improved over five years, from 98.51% to 99.32%. But the amount-based number has gone the other direction, from 92.74% to 93.78% (and that’s after dipping to 93.78% in the latest year after a brief improvement). The average denied claim amount has quadrupled from ₹15.1 lakh in 2020-21 to ₹59.6 lakh in 2024-25.

Put differently: they pay the small claims readily. The larger the claim, the harder it gets. In FY 2024-25, just 96 denied claims at Bajaj Allianz accounted for ₹57.19 crore in rejected payouts. The average paid claim at Bajaj Allianz is ₹6.2 lakh; the average denied claim is nearly 10 times that.

Shriram Life: the widest gap in the industry

98.45% by count sounds passable. By amount, only ₹81.80 out of every ₹100 claimed actually reaches the nominee. That 16.7 percentage point gap is the largest of any insurer with meaningful claim volumes.

This isn’t new either. The gap has bounced between 13 and 20 percentage points across the last five years. In FY 2024-25, 75 denied claims accounted for ₹32.82 crore. The average denied claim: ₹43.8 lakh. The average paid claim: ₹3.1 lakh. That’s a 14x difference between what they’re willing to pay and what they’re willing to deny.

HDFC Life: a genuine turnaround

HDFC Life had the worst CSR-by-amount numbers in the industry during COVID. In FY 2021-22, they reported 188 “rejected” claims (a separate IRDAI category from “repudiated”) worth ₹171.83 crore — an average of ₹91.4 lakh per rejected claim. Combined with 136 repudiated claims, their total denials hit 324 that year.

After 2022, HDFC Life stopped reporting any claims in the “rejected” category. But this isn’t a reclassification trick. The “rejected” column still exists in the IRDAI handbook for all insurers (LIC and Shriram Life both report non-zero rejected claims in 2024-25). Total denials at HDFC Life genuinely dropped from 324 to 58 over four years. If they’d simply moved rejected claims into repudiated, the repudiated count would have jumped. It didn’t.

Whatever changed internally at HDFC Life between 2022 and 2025, the numbers reflect a real improvement. Their 2024-25 CSR of 98.14% by amount, with a 1.6pp gap, puts them comfortably in the top half of the industry.

What the average denied claim reveals

Here’s a question most CSR comparisons skip: when an insurer denies a claim, how big is that claim compared to what they normally pay? The ratio between average denied and average paid tells you whether denials are spread evenly or concentrated on big-ticket policies.

When the ratio crosses 5x, it means denied claims are heavily skewed toward high-value policies. Shriram Life’s 14.2x is extreme; their typical paid claim is ₹3.1 lakh while their typical denied claim is ₹43.8 lakh. Bajaj Allianz at 9.7x and Max Life at 9.0x show the same pattern.

Compare that with ICICI Prudential (2.6x) and Tata AIA (2.5x). Their denied claims are bigger than their paid claims (that’s true everywhere), but the difference is proportionate. The gap between count-based and amount-based CSR is smaller at these insurers because denials aren’t concentrated on the largest policies.

For anyone buying term insurance with ₹50 lakh to ₹2 crore cover, this ratio matters more than the headline CSR number. A 99% CSR by count means nothing to you if the claims getting denied are the ones in your coverage range.

How to read CSR when comparing term plans

Five things to check before using CSR numbers to pick an insurer:

1. Look at CSR by amount, not count. Count-based CSR is the metric insurers prefer to advertise. Amount-based CSR is the metric that tells you what happens to large claims.
2. Check the gap between count and amount. Anything over 3 percentage points is a red flag. It means denied claims are significantly larger than paid claims at that insurer.
3. Look at the 3-5 year trend, not just the latest year. A single good year can follow a reporting change or a backlog clearance. Consistent performance over multiple years is more reliable.
4. Check the average denied claim amount. If it’s 5x or more than the average paid claim, denials are concentrated on high-value policies. This matters if you’re buying a large term plan.
5. Remember what this data covers. IRDAI reports “Individual Death Claims” across all policy types: term, endowment, whole life, ULIP, money-back. This is why LIC’s average claim is ₹2.5 lakh (mostly traditional policies). Private insurers with higher averages likely have more term policies in their mix.

For more on what happens after a claim is filed, read our claims filing guide. If you haven’t figured out the right cover amount yet, our coverage calculator can help you work backward from your family’s actual expenses.

Frequently asked questions

Methodology

Data source: IRDAI Handbook on Indian Insurance Statistics (2024-25 edition), with historical data from previous editions (2019-20 through 2023-24).

Calculation: CSR = Claims Paid ÷ (Claims Paid + Claims Repudiated + Claims Rejected). Pending claims and unclaimed amounts are excluded from the denominator, following standard IRDAI methodology. “Claims Settled” in our ranking equals Claims Paid plus Claims Repudiated/Rejected.

Inclusion criteria: The main ranking table includes insurers with 1,000 or more settled individual death claims in FY 2024-25. Insurers below this threshold (Aegon/Bandhan Life, Aviva Life, Edelweiss Life, Pramerica Life) are noted separately. All amounts are in Indian Rupees, using crore and lakh as appropriate.