Definition
Claim Settlement Ratio (CSR)
The claim settlement ratio is the percentage of claims an insurer settles out of the total claims received in a year.
The Claim Settlement Ratio (CSR) measures how many claims an insurer pays versus how many it receives. A high CSR (close to 100%) suggests the insurer reliably honours valid claims, which is reassuring for life insurance where the payout matters most to your family.
The figure is reported annually and published by the regulator IRDAI. However, CSR alone is not the full picture — also look at claim rejection reasons, average settlement time, and the amount-wise settlement ratio, since a company could settle many small claims but contest large ones.
For term insurance especially, buy from an insurer with a consistently high CSR, and ensure you disclose all material facts honestly, since the commonest cause of rejected claims is non-disclosure.
Related terms
- Sum AssuredSum assured is the guaranteed amount an insurer pays to the policyholder or nominee on the occurrence of the insured event.
- Term InsuranceTerm insurance is pure life cover that pays your family a large sum if you die during the policy term, in exchange for a low premium.
- Health InsuranceHealth insurance covers medical and hospitalisation expenses in exchange for an annual premium.
Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.