Best Life Insurance Companies in India in 2014

Best Life Insurance Companies in India in 2014.

Every month over one lakh searches are done in India on the Best Insurance companies in India. How do we define the Best Insurance Company? You may say that what is best for one person may not be the best for another. However there are some factors all of us can agree on that we look for in Insurance companies. We would all want our insurance companies to:

1.       Settle a high percentage of claims

2.       Have few complaints

3.       Have customers who come back to pay renewal commissions

1.    What percentages of claims do Insurers Reject?

The reason a customer pays premium is to ensure that the insurer is there for his/her dependents when he is no longer around. Acceptance of claims is the single most critical element of an insurer’s performance.

Here is the Data on claims rejection by Insurers.

Insurer	Percentage of Claims Accepted in FY 2013-14
	Overall	Within two years of taking Policy	Beyond 2 Years of taking Policy
LIC of India	98.9%	99.7%	99.2%
HDFC Standard Life	96.3%	96.4%	99.9%
ICICI Prudential Life	94.6%	94.9%	99.7%
IDBI Federal	94.4%	94.7%	99.7%
Max Life	93.9%	94.6%	99.3%
Bajaj Allianz Life	93.4%	94.1%	99.3%
SBI Life	93.2%	93.8%	99.4%
Sahara	93.1%	95.0%	98.1%
TATA AIA Life	92.5%	93.9%	98.6%
Star Union Daiichi	92.3%	92.4%	99.9%
Kotak Mahindra	92.2%	92.9%	99.3%
PNB Met Life	90.4%	90.5%	99.9%
Bharti AXA Life	90.0%	91.4%	98.6%
Birla Sun Life	89.9%	90.5%	99.5%
Exide Life	89.9%	90.6%	99.3%
Canara HSBC	89.1%	91.9%	97.2%
Reliance Life	88.1%	91.3%	96.8%
Aviva	84.1%	87.5%	96.6%
Future Generali Life	83.6%	84.2%	99.5%
AEGON Religare	81.0%	82.0%	99.0%
Shriram Life	79.9%	79.8%	100%
Edelweiss Tokio Life	76.2%	76.2%	100%
DLF Pramerica	61.7%	63.4%	98.3%
India First Life	61.3%	63.3%	97.8%

While an argument can be made that most of the rejections are within 2 years and may be a result of fraud, it still begs the question about the quality of controls (or the lack of it) that insurers have for acquiring new business. Ideally the Insurer should have an acceptance ratio in the high nineties. For the most part a customer should be fine with an insurer who acceptance is in the 90s.

2.    Do customers continue to pay their renewal premiums?

First thing that you may want to know is how many customers continue to pay their premiums after the first year.  If the customers are not paying renewals then it means that either they have been sold a policy that is not fit for purpose or it is a forced sale.Here are the results of the Financial Year ending March 2014

Insurer	Percentage Paying Premium into third Year
HDFC Standard Life	71%
Max Life	66%
ICICI Prudential Life	68%
Kotak Mahindra	77%
Birla Sun Life	60%
TATA AIA Life	60%
SBI Life	65%
Exide Life	57%
Bajaj Allianz Life	48%
PNB Met Life	47%
Reliance Life	58%
Aviva	52%
Sahara	73%
Shriram Life	82%
Bharti AXA Life	54%
Future Generali Life	33%
IDBI Federal	76%
Canara HSBC	86%
AEGON Religare	48%
DLF Pramerica	44%
Star Union Daiichi	44%
India First Life	56%
Edelweiss Tokio Life	45%
LIC of India	71%

Ideally you would want the insurance company to be able to retain over 80% of its customers into the third year.  There are only two insurers that meet this benchmark. Worryingly more than one in four insurers have a retention rate of less than 50%. Clearly there is a problem in the Industry where customers are often sold products that do not fit their needs or that they do not want. If a significant proportion of the customers do not like the products they have been sold , the chances are that neither will you.

3.    How many Complaints do the Insurers have?

Complaints are an accepted parameter of service performance of any industry and the Insurance industry is no exception.  Here is the data on Sales complaints per 10000 policies sold.

Insurer	Sales Complaints per 10000 Policies	Percentage complaints
LIC of India	20	0.2%
Shriram Life	21	0.2%
India First Life	33	0.3%
Edelweiss Tokio Life	69	0.7%
IDBI Federal	78	0.8%
Star Union Daiichi	103	1.0%
SBI Life	141	1.4%
PNB Met Life	218	2.2%
DLF Pramerica	223	2.2%
ICICI Prudential Life	246	2.5%
Exide Life	335	3.4%
Max Life	365	3.7%
Kotak Mahindra	382	3.8%
Aviva	509	5.1%
Reliance Life	523	5.2%
HDFC Standard Life	594	5.9%
TATA AIA Life	659	6.6%
Bharti AXA Life	662	6.6%
Birla Sun Life	740	7.4%
Canara HSBC	838	8.4%
AEGON Religare	868	8.7%
Bajaj Allianz Life	1150	11.5%
Future Generali Life	1434	14.3%

While the top 5 Insurers in this category fare quite well there are a few with a rate of complaints higher than 10%.

Hope this data helps you identify Insurers that you find acceptable. Once you have found companies that meet your criteria then look at premiums and select the best premium from the companies in your consideration set. You can get all the details of the Best Life Insurance Companies in India at www.policylitmus.com.