New Delhi, May 25 -- The Insurance Regulatory and Development Authority of India (IRDAI) has directed the non-life insurance industry to arrive at a standard definition of a 'claim' and a uniform methodology for calculating claim settlement ratios across various lines of business - a move aimed at ending a long-standing practice of inconsistent reporting that has obscured the true picture of insurer performance.

The Problem: Definitions That Don't Add Up

Claim settlement ratio is a key metric used by consumers and analysts to assess an insurer's financial health and customer service standards. However, different companies have been applying different definitions, making comparisons unreliable and, in some cases, misleading.

The core in...