Claim settlement ratio refers to the number of claims that the insurer has paid following the death of policyholders. So a claims settlement ratio of 80 percent means that the insurer settles 80 out of every 100 claims filed with the insurer.
So a life insurer with 95% claim settlement ratio is obviously than the one with 75%. If you see closely, all good insurers in India ( LIC, SBI Life, Max Life, HDFC Life etc.) have claim settlement ratios that exceed 90%. Hence, one should ALWAYS look at claim ratio o the insurers before buying a term insurance plan. In a way, it is an indication of the reputation of the company.
You can check historical claim settlement related data by getting a guote here.