The company further stated that its Claim Settlement Ratio stood at 99.02% for the ongoing fiscal year. The number shared by the firm is amongst one of the highest in the industry.
Solvency Ratio is maintained by insurers, globally, and depicts the financial health of the company. “At 581%, Bajaj Allianz Life’s solvency ratio indicates the insurer’s capability of meeting both, short-term and long-term liabilities,” stated a press release.
The key parameters shared by Bajaj Allianz strengthens its position in the market, and showcases the insurer’s financial strength to keep its customers’ Life Goals secured.
“Customer First philosophy is now our north star, and through our transformational journey over the last five years we have taken every step to build simplicity and efficiencies to ensure we remain true to our promise made to our customers. Our Solvency Ratio and Claims Settlement Ratio stand testament to this commitment. We will continue to invest in this journey to become the preferred life insurer to enable Life Goals of many more customers in India,” said Tarun Chugh, MD & CEO, Bajaj Allianz Life Insurance.
According to Irdai guidelines, all companies are required to maintain a solvency ratio of 150% to minimise bankruptcy risk. Solvency ratio helps identify whether the company has enough financial buffer to settle all claims in extreme situations. Hence, it is a good indicator of an insurance company’s financial capacity to meet both its short-term and long-term liabilities.
The solvency margin is calculated by comparing a company’s obligations to its current assets. To put it another way, the solvency ratio is computed by dividing a company’s after-tax operating income by its debt liabilities.
Solvency Ratio = (Net Income + Depreciation)/Liabilities
The solvency ratio defines how good or bad an insurance company’s financial situation is on defined solvency norms.
