The life insurance sector in India has grown rapidly in recent years, and one of the most closely watched indicators of performance is the claim settlement ratio. This ratio reflects the proportion of claims an insurer actually pays out, and it strongly shapes how customers perceive the reliability and fairness of a company. When insurers settle claims promptly and consistently, existing policyholders are more likely to stay, and potential customers gain the confidence to purchase new policies. Consequently, firms with consistently strong settlement performance are expected to experience higher customer acquisition and retention, leading to sustained customer growth over time. Customer growth in life insurance is not only a function of marketing and distribution strength, but also of post‑sale service quality, in which claims handling plays a central role. When policyholders or their beneficiaries face critical life events, a smooth and timely claim process can generate positive word‑of‑mouth, repeat purchases, and cross‑selling opportunities. On the other hand, frequent disputes, delays, or rejections in claims may damage the company’s reputation and discourage new customers from joining, even if the products are competitively priced. Thus, claim settlement ratio can act as both a performance metric and a strategic tool for differentiation in a crowded market. In this study, correlation and regression analysis are used to empirically examine the relationship between claim settlement ratio and customer growth among selected life insurance companies in India. Correlation analysis helps to measure the strength and direction of association between these two variables, while regression analysis assesses the extent to which variations in customer growth can be explained by changes in claim settlement ratio. By quantifying this relationship, the research aims to provide evidence‑based insights that can guide insurers, policymakers, and investors in understanding how operational efficiency in claims management translates into market expansion and long‑term business sustainability.
Sahu et al. (Fri,) studied this question.