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The Insurance Regulatory and Development Authority of India (IRDAI) is an apex body which governs the workings of the life and non-life insurance companies operating in the market. Every insurance company is required to follow the rules and guidelines laid down by the IRDAI. IRDA also publishes regular reports on the performance of insurance companies. The amount of business done by insurers, their claim settlement ratios, incurred claim ratios, etc. are computed and published by IRDA regularly. Amongst these publications, the claim settlement ratio of insurance companies is very widely used. Let’s understand what this is.
The claim settlement ratio of an insurance company measures the proportionate claims which the company has settled from the total number of claims made on it in a financial year. The ratio is calculated using the following formula –
Claim settlement ratio = (total claims paid by the company / total claims made on it) * 100
The ratio is expressed as a percentage. Higher the percentage the better are the chances of the claims being settled by the insurance company.
IRDA also publishes the claim settlement ratio and incurred claim ratio of health insurance companies. The ratios are calculated and published at the end of each financial year. The ratio shows policyholders the probability of their health insurance claims being settled.
Since health insurance policies are important and have also become quite popular, a potential customer can judge the performance of a health insurance company based on the claim settlement ratio published by the IRDA. This makes choosing the health insurance company easy. It helps customers make informed choices.
There are more than twenty health insurance companies in the insurance market. Comparing and selecting the best insurer, therefore, becomes quite difficult. However, with IRDA’s health insurance claim settlement ratios, this comparison becomes easy. Individuals can choose a company after choosing the best health insurance plan and then comparing the claim settlement ratios.
|Health Insurance Company||Claim Settlement Ratio||Cashless Hospitals|
|Care Health Insurance Company||95%||9,592|
|Niva Bupa (formerly known as Max Bupa) Health Insurance Company||96%||8,701|
|Star Health Insurance Company||90%||11,035|
|Aditya Birla Health Insurance Company||94%||8,787|
|DIGIT Health Insurance Company||96%||5,479|
|Reliance Health Insurance Company||100%||8,014|
|Royal Sundaram Health Insurance Company||89%||8,332|
|Oriental Health Insurance Company||89%||2,716|
|Liberty Health Insurance Company||94%||5,552|
|Future Generali Health Insurance Company||92%||6,303|
Claim Settlement Ratio (CSR) is the ratio of the total number of claims settled by an insurance company against the total number of claims that the company receives for processing for a financial year.
Claim Settlement Ratio (CSR) is the ratio of the total number of claims settled by an insurance company against the total number of claims that the company receives for processing for a financial year. The CSR customers to identify the ability of an insurance company to meet claim requests. A ratio above 80% is generally considered as a good claim settlement ratio in health insurance.
Health insurance companies in India in the year 2022 with best Claim Settlement Ratio are:
IFFCO Tokio General Insurance (96.57%)
Magma HDI (96.41%)
New India Assurance (95.92%)
(Source - IBAI Claims Insight Handbook 5th Addition)
The top health insurance companies on the basis of Claim Settlement Ratio (CSR) are:
IFFCO Tokio health insurance
Aditya Birla Health Insurance
Bajaj Allianz Health Insurance
Tata AIG Health Insurance
Bharti AXA Health Insurance
Care Health Insurance
United India Health Insurance
Universal Sompo Health Insurance
SBI Health Insurance
The formula to calculate health insurance claim ratio is:
Incurred Claim Ratio = Net claims incurred / Net Premiums collected.
Thus, health insurance claim ratio is the overall value of total claims that insurance company has paid divided by the total sum of premium collected during the same period.
Insurance claims might get rejected if the information offered is wrong or if you miss to add any information. Thus, wrong information is the most common factor for claims getting rejected. This is because personal information such as age of the insured, profession of the insured, his/her health condition as well as medical history etc. determines the premium and risk coverage of a health insurance policy.
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