Life Insurance Payouts Moderate in FY23: IRDAI Report

New Delhi, Jan 7 (PTI) Payout by life insurance companies declined by about Rs 6,000 crore during 2022-23 because of lesser number of death claims as compared to previous financial year which was impacted by COVID-19.

The life insurance industry paid a total benefit of Rs 4.96 lakh crore in 2022-23 as compared to Rs 5.02 lakh crore in FY22, according to the latest annual report released by sector regulator IRDAI.

During FY22, the year hit by COVID-19 wave, the insurance companies paid Rs 60,821.86 crore as death claims. This came down by Rs 19,000 crore to Rs 41,457 crore in 2022-23.

The benefits paid on account of surrenders/withdrawals increased by 25.62 per cent to 1.98 lakh crore in 2022-23, of which public sector insurers accounted for 56.27 per cent.

During the year, out of the total surrender benefits, it said, benefits for ULIP (unit-linked insurance plans) accounted for 62.51 per cent for private insurers and 1.56 per cent for state-owned life insurers.

In case of individual life insurance business, during the year 2022-23, out of the 10.76 lakh total death claims, the life insurance companies paid 10.60 lakh death claims, with a total benefit amount of Rs 28,611 crore, the annual report said.

The number of claims repudiated was 10,822 for an amount of Rs 1,026 crore and the number of claims rejected was 4,340 for an amount of Rs 24 crore, it said.

The claims pending at the end of the year were 833 for Rs 350 crore, it said, adding, the claim settlement ratio of public sector insurers was 98.52 per cent as at March 31, 2023 compared to 98.74 per cent as at March 31, 2022.

The claim settlement ratio of private insurers was 98.02 per cent during 2022-23 compared to 98.11 per cent during the previous year.

The industry's overall settlement ratio decreased to 98.45 per cent in 2022-23 from 98.64 per cent in 2021-22.