As expected, there was a phenomenal discussion on yesterday’s post about term insurer’s sample quotes, and among the many great comments there – Salil left a comment about Form L-40, which is a mandatory disclosure that all life insurers have to make about the number of outstanding claims, new claims filed with them, number of claims they settled, and the number that they repudiated.
I went to the IRDA website, and sure enough it had links to the disclosure pages of all the insurers, and I was able to consolidate the data from those links.
I chose December 31st 2010 quarter because I wanted to compare a recent quarter and that was one which most insurers had info about. In a few cases where I didn’t find information about that quarter I took another quarter and that is showed in the table header.
I left the insurers that had no quarterly data available but there were just 3 of those.
The next thing I did was to consider data only for deaths because that’s what we’re interested in.
I have split the data into 3 tables because that is easier to read.
Now, the claims repudiated are further reported as claims repudiated that were less than 2 years old, and claims repudiated that were greater than 2 years old. Insurers that have been around for longer like LIC will have a lot of claims that are more than 2 years old, and they can’t ordinarily challenge those claims. However, the fact that there are claims repudiated that are more than 2 years old shows that there are some exceptions to this – most probably where you can establish fraud. If any of you know what this is then please do leave a comment. In the case of LIC – out of the 506 claims they repudiated 443 were of less than 2 years, and 63 were greater than 2 years, so about 12.5% of the claims they repudiated were older than 2 years – not an insignificant number.
This makes for great reading along with the sample quotes because this shows you the volume of business each insurer is doing, and how they fare in terms of paying out claims.
|1||Insurer||Aegon Religare||Bharti AXA Life Insurance||Bajaj Allianz Life Ins||Birla Sunlife||Canara HSBC OBC Life Ins||DLF Pramerica|
|2||Claims O/S at the beginning of the year||22||127||2,548||173||74||14|
|3||Claims reported during the year||27||222||6,485||3,113||72||17|
|4||Claim settled during the period||13||168||6,268||3,029||50||6|
|5||Claims repudiated during the period||20||24||465||146||11||6|
Here is the next table.
|1||Insurer||Future Generali||HDFC Life||IDBI Federal||India Life (for 31st March 2011)||ING Life||Kotak Life|
|2||Claims O/S at the beginning of the year||2||208||70||–||112||411|
|3||Claims reported during the year||230||1,196||105||13||1,550||631|
|4||Claim settled during the period||162||1,139||75||7||1,462||627|
|5||Claims repudiated during the period||51||40||19||1||58||33|
Here is the last one.
|1||Insurer||SBI Life||Shriram Life (June 2010)||Tata AIG||LIC||Reliance Life||Sahara Life (Sep 2010)|
|2||Claims O/S at the beginning of the year||685||475||26||53,765||957||281|
|3||Claims reported during the year||5,745||212||883||181,165||4,025||233|
|4||Claim settled during the period||4,622||197||702||182,211||3,272||156|
|5||Claims repudiated during the period||894||138||152||506||256||70|
Finally, here is a chart on the claims settled as a percentage of new plus outstanding claims for the quarter of December 31st 2010 (in most cases). (Click twice to magnify).
Now you have quote data, and you have volume data, so you can take a look at that and see how that stacks up. I’ll not give any opinion on these numbers because I’m still not very certain what to make of them myself, and feel that we need to look at some more data.
In the meantime, please leave your comments on what you make of all this data, and also on how to build to this post.
This is turning out to be the best reader driven discussion we’ve had so far, and it’s only appropriate because a lot of you have much more knowledge on insurance than I do.
Finally here are the links to the sources, and apologies for not responding to comments – had limited time and thought this exercise was more meaningful.
http://insurance.birlasunlife.com/AboutUs/PublicDisclosure/tabid/386/Default.aspx Â Â Â Â Â Â Â Â Â Â Â http://www.canarahsbclife.com/lifeapp/portal/canh/financialStatement
http://www.futuregenerali.in/LifeInsurance/LifeOther/LifeOtherPages/PublicDisclosure.aspx# Â http://www.hdfclife.com/AboutUs/AboutUsFinancialHighlights.aspx
http://www.shriramlife.com/formslist6.jsp;jsessionid=04B83A3EB4E5C4834D20C039209DEA79Â Â Â Â Â Â Â Â Â Â http://www.tata-aig-life.com/public-disclosure/public-disclosure-2011-q3.html