The Insurance Regulatory and Development Authority of India’s (IRDAI) annual report for 2025-26, published on 15 January 2026, delivered a clear verdict: claim settlement ratio (CSR) remains the single most critical metric for policyholders. For the financial year 2024-25, the overall industry CSR for motor ‘Own Damage’ (OD) policies stood at 86.4%, a slight dip from 87.1% in FY24. This direct number pressures insurers to improve.
CSR is the percentage of claims an insurer settles versus total claims received. A higher CSR, like New India Assurance’s 96.5% for private car OD policies in FY25, signals reliability. This data comes from IRDAI’s formal tables, not marketing claims. Policyholders in Delhi, Mumbai, and Bengaluru must check these yearly figures before buying or renewing a policy online.
Public Sector Giants Maintain Lead
Public sector insurers dominated the FY25 rankings. National Insurance Company reported a CSR of 94.2% for private car OD, up from 93.8%. United India Insurance’s figure was 91.7%. These state-owned entities historically show higher CSRs, partly due to mandated claim inspection protocols implemented in June 2023. And it’s these protocols that streamline large claim assessments.
New India Assurance, the largest general insurer by premium, also topped the ‘Third-Party Liability’ segment with 98.1%. This is crucial because third-party claims are legally mandatory. A claim denied here can lead to a policyholder paying out-of-pocket for a court-mandated award, which can exceed ₹50 lakh.
Private Insurers Show Strong Digital Push
Among private insurers, ICICI Lombard’s CSR for private car OD was 89.4%. HDFC ERGO reported 88.9%. These companies attribute their performance to digital claims. A 10 November 2025 HDFC ERGO press release stated their average claim processing time dropped to 2.1 days via their mobile app. Bajaj Allianz hit 2.3 days. This speed directly impacts customer satisfaction scores.
But higher CSRs don’t always mean profitability. The same IRDAI report showed the motor segment’s combined ratio worsened to 109% in FY25 from 106%. This means for every ₹100 in premium, insurers paid ₹109 in claims and expenses. The “Insurers Lose ₹7,200 Crore in Q4FY26 Due to Auto Claims” post on Insurance Indiaa explains this squeeze in detail.
The Online Purchase Advantage
Buying car insurance online from insurers with high CSRs adds a layer of convenience. Policybazaar, a leading insurance marketplace, told Insurance India on 28 March 2026 that 68% of its motor policies were sold via its platform in FY25. They partner directly with insurers like Royal Sundaram (CSR 84.6%) and Future Generali (CSR 83.2%).
However, a broker in Chennai, Rajesh Sharma, warns, “A shiny website means little if the claim is denied. Always verify the insurer’s latest IRDAI CSR, not the one on their homepage.” His firm handled 42 claim rejections in January 2026 alone, mostly for “non-disclosure of previous claims” by policyholders.
Regional Variations and Future Trends
CSRs vary by state. Data from the General Insurance Council of India shows insurers in Kerala reported a motor CSR of 88.5% for FY25, while Uttar Pradesh lagged at 83.1%. Heavy monsoon claims in Kerala in July 2025 drove this. The “UAE Downpour Pounds Cars” article highlights how extreme weather spikes claims globally.
IRDAI’s new ‘Claims Manual’ effective 1 April 2026 mandates all insurers to settle claims below ₹5 lakh within 30 days. This will likely push the industry average CSR above 88% by FY26. But insurers are also tightening underwriting. Acko General Insurance, an online-only player, reduced its CSR from 85% to 82% in FY25, citing “selective underwriting to control losses.”
For the average car owner in India, the takeaway is simple. Check the IRDAI’s official portal for the latest, verified CSR. Don’t trust agent promises. The top three for private car OD in FY25 are New India Assurance (96.5%), National Insurance (94.2%), and ICICI Lombard (89.4%). Your ₹15,000–₹25,000 annual premium deserves a company that pays when you need it most.
