5 min read
Updated on Apr 28, 2023
Though there are many good and reliable health insurance companies in the market, finding the perfect policy to suit your needs might still be a burdensome task. So, how do you make a decisive decision of buying a good health insurance policy? Buying a good health insurance plan requires you to think about a great number of things such as coverage amount, premium to be paid, benefits earned and more.
All these aspects are very important and need consideration while buying a health policy. However, one such aspect that suffices for most of the things is choosing the right health insurance company. If you choose the right insurance company, most of the things fall into place. Now, the point is, how to choose the best health insurer.
When you have so many insurance companies to choose from, it is obvious to get confused in making the right choice. Moreover, there are various components that can be checked while choosing a good insurance provider? Checking all of them may not be possible. But you can check the most prominent one, which is related to claim settlement. Hence, while looking for plans to secure your health, make sure to pay great attention to the health insurance claim ratio, which is instrumental in helping you pick the right insurer.
Health Insurance Incurred Claim Ratio (ICR) is a ratio that measures the capability of an insurance company to pay claims. If you go by its definition, ICR is the total claims paid by an insurance provider divided by the total premium received/earned by them over a period of time.
So, if the ICR of your insurer is above 100%, it means that the claims paid by the company are more as compared to the premium received. If this is the case, it means the business of the insurer might be suffering and they might reject certain claims or even raise the premium price to be in business.
Similarly, if the incurred claim ratio health insurance of an insurer is between 50 to 100%, it implies that the insurer has received enough money in premiums as compared to what they have paid in claims. If this is the case, it means that the insurer is running a steady business that is generating good money and is capable of paying your claims.
On the other hand, if an insurer has ICR that is below 50%, it means that the company is making huge profits. But at the same time, it also means that the business may be hardly settling claims, which is not good news for the policyholder.
So, basically if the ICR is between the range of 75 to 90%, it can be termed as the best claim settlement ratio in health insurance.
Let’s take a look at the ICR of insurance companies in India during the period 2020-21 and 2021-22 to understand which insurance company might serve your purpose better in 2023.
|Insurance Company||Incurred Claim Ratio 2020-21||Incurred Claim Ratio 2021-22|
|Edelweiss General Insurance Co. Ltd.||111.57%||112.32%|
|Bajaj Allianz General Insurance Co. Ltd.||77.31%||90.64%|
|Acko General Insurance Ltd||84.64%||103.75%|
|Bharti AXA General Insurance Co. Ltd.||65.37%||NA|
|Future Generali India Insurance Co. Ltd.||90.04%||88.44%|
|ICICI Lombard General Insurance Co. Ltd.||78.00%||91.67%|
|Cholamandalam MS General Insurance Co. Ltd.||77.35%||117.08%|
|Go Digit General Insurance Ltd.||63.80%||48.94%|
|HDFC ERGO General Insurance Co. Ltd||79.30%||97.47%|
|IFFCO Tokio General Insurance Co. Ltd.||99.49%||130.65%|
|SBI General Insurance Co. Ltd.||60.72%||81.92%|
|Kotak Mahindra General Insurance Co. Ltd.||55.17%||72.11%|
|Tata AIG General Insurance Co. Ltd.||67.27%||86.53%|
|The New India Assurance Co. Ltd.||92.79%||124.54%|
|Health Insurance Company||Incurred Claim Ratio 2020-21||Incurred Claim Ratio 2021-22|
|Aditya Birla Health Insurance Co. Ltd.||49.99%||69.56%|
|Care Health Insurance Ltd.||55.15%||65.07%|
|ManipalCigna Health Insurance Co. Ltd||61.13%||76.17%|
|Reliance Health Insurance Ltd.||56.09%||62.12%|
|Navi Bupa Health Insurance Co. Ltd.||45.68%||196.55%|
|Star Health and Allied Insurance Co. Ltd.||94.44%||87.06%|
There has been an increase in the cost of healthcare treatments over the last few years. The jump is obvious in the post covid scenario due to the scare of the disease. It indicates that healthcare has become a subject of supreme importance in the present time.
Though it may not always be possible to avoid getting sick or visiting the hospital, staying prepared for a medical or health emergency with a comprehensive health insurance plan is necessary. And it can be done with the help of a health insurance plan purchased from a reliable health insurance company with a good ICR or Incurred Claim Ratio.
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WThe ideal Incurred Claim Ratio for a health insurance company should be within the range of 75% to 90%.
The Incurred Claim Ratio (ICR) is crucial because it indicates the ability of the insurer to settle claims. Based on the ICR of the company, the financial performance of the insurer is decided.
If the Incurred Claim Ratio (ICR) of an insurer is above 100%, it would indicate that the insurer is settling more claims as compared to the earned premiums. This could be an indication that the insurer is undergoing financial losses and might increase the cost of premiums or may reject future claims.
Claims incurred in insurance implies claims for which the insurer is obliged to make the payment before or on the valuation date.
ICR is calculated by dividing the total claim amounts settled (by the insurer) by the total premiums received in a given financial year.
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