Health insurance companies and claim settlement ratio

In India, coordination between hospitals and health insurance is a pivotal aspect of the healthcare ecosystem. The country's healthcare infrastructure includes a wide range of hospitals, from public sector units offering basic health services to private sector hospitals providing specialised care. For most Indians, having health insurance is crucial as it helps manage the high costs of medical treatment in both public and private facilities.

Health insurance in India serves as a financial buffer for families against the high cost of medical care. It is particularly vital in a country where healthcare expenses can often cause financial distress. Most health insurance policies cover a variety of expenses, including hospitalisation, medication, and even pre and post-hospital care, which can be quite comprehensive given the rising cost of medical services.

Claim Settlement Ratio in Health Insurance

However, the effectiveness of health insurance policies is often gauged by the Claim Settlement Ratio (CSR), a metric that reflects the reliability and performance of insurance companies. It indicates the proportion of claims the insurer has successfully paid out of the total claims received over a financial year. A higher CSR indicates an insurer's robustness and reliability in settling claims—a sign of confidence for policyholders—especially during medical emergencies when financial support is most needed.

For potential policyholders, CSR is a vital statistic to consider when selecting an insurer. It not only represents the company's ability to handle claims efficiently but also gives insights into its operational integrity. Insurers with a consistently high CSR are preferred because they are perceived as more reliable and reassuring for individuals who depend on their health insurance for emergency medical expenses.

Claims settlement ratio of general and health insurance companies

Claim settlement ration serves as a good benchmark to measure the efficiency of the insurance company. Here's how major general and health insurance companies fare according to IRDAI data from 2022-23.

Insurance Company	Number of claims paid (%)
Public sector insurers
The Oriental Insurance Co. Ltd.	91.62
National Insurance Co. Ltd.	91.31
United India Insurance Co. Ltd.	91.1
The New India Assurance Co. Ltd.	90.73
Private sector insurers
Reliance General Insurance Co. Ltd.	98.75
HDFC ERGO General Insurance Co. Ltd.$	98.59
Zuno General Insurance Co. Ltd.$	98.54
ICICI Lombard General Insurance Co. Ltd.	98.53
Acko General Insurance Ltd.	97.68
Kotak Mahindra General Insurance Co. Ltd.	97.61
Liberty General Insurance Ltd.	97.46
Raheja QBE General Insurance Co. Ltd.	97.3
Go Digit General Insurance Ltd.	96.83
SBI General Insurance Co. Ltd.	96.47
Royal Sundaram General Insurance Co. Ltd.	96.17
Tata AIG General Insurance Co. Ltd.	95.46
Navi General Insurance Ltd.	95.13
Future Generali India Insurance C. Ltd.	94.98
Magma HDI General Insurance Co. Ltd.	94.72
Cholamandalam MS General Insurance Co. Ltd.	93.63
Bajaj Allianz General Insurance Co. Ltd.	93.54
Universal Sompo General Insurance Co. Ltd.	91.58
IFFCO Tokio General Insurance Co. Ltd.	90.65
Shriram General Insurance Co. Ltd.	86.86
Bharti AXA General Insurance Co. Ltd.#
Specialized insurers
Agriculture Insurance Co. of India Ltd.	47.17
ECGC Ltd.~	58.98
General insurers total	80.33
Stand-alone health insurers
Care Health Insurance Ltd.	100
Niva Bupa Health Insurance Co. Ltd.	100
ManipalCigna Health Insurance Co. Ltd.	99.96
Star Health and Allied Insurance Co. Ltd.	99.21
Aditya Birla Health Insurance Co. Ltd.	99.01
Reliance Health Insurance Ltd.	87.5
Stand-alone health insurers total	99.48

Incurred claims ratio of general and health insurers

Incurred Claim Ratio (ICR) is another standard with which consumers can judge the health of their insurance companies. ICR is the percentage of the total claim amount paid to the total premium collected in a given time. Policyholders should favour a low ICR, which means a conservative approach to claims and efficient use of the premium they pay. Here is the annual Incurred Claims Ratio for general health insurers in India. Data is sourced from the Insurance Regulatory and Development Authority of India (IRDAI).

Insurers	Health claim ratio (2021-2022)	Health claim ratio (2022-2023)
Acko General Insurance Co. Ltd.	103.75	83.88
Bajaj Allianz General Insurance Co. Ltd.	90.64	74.27
Cholamandalam MS General Insurance Co. Ltd.	117.08	67.88
Future Generali India Insurance Co. Ltd.	88.44	79.18
Go Digit General Insurance Ltd.	48.94	71.87
HDFC ERGO General Insurance Co. Ltd.	97.47	79.04
ICICI Lombard General Insurance Co. Ltd.	91.67	77.33
IFFCO Tokio General Insurance Co. Ltd.	130.65	111.18
Kotak Mahindra General Insurance Co. Ltd.	72.11	56.01
Liberty General Insurance Co. Ltd.	89.3	74.17
Magma HDI General Insurance Co. Ltd.	66.42	72.1
Navi General Insurance Co. Ltd.	28.56	59.28
Raheja QBE General Insurance Co. Ltd.	109.54	138.67
Reliance General Insurance Co. Ltd.	98.76	86.31
Royal Sundaram General Insurance Co. Ltd.	90.22	83.36
SBI General Insurance Co. Ltd.	81.92	73.92
Shriram General Insurance Co. Ltd.	37.07	51.53
Tata AIG General Insurance Co. Ltd.	86.53	78.33
Universal Sompo General Insurance Co. Ltd.	113.39	82.84
Zuno General Insurance Co. Ltd.	112.32	89.59
PRIVATE SECTOR INSURERS AVERAGE	94.66	80.09
National Insurance Co. Ltd.	125.53	102.35
The New India Assurance Co. Ltd.	124.54	103.33
The Oriental Insurance Co. Ltd.	139.86	130.09
United India Insurance Co. Ltd.	120.21	89.57
PUBLIC SECTOR INSURERS AVERAGE	126.8	105.77
Aditya Birla Health Insurance Co. Ltd.	69.56	64.68
Care Health Insurance Ltd.	65.07	53.82
ManipalCigna Health Insurance Co. Ltd.	76.17	64.66
Niva Bupa Health Insurance Co. Ltd.	62.12	54.05
Reliance Health Insurance Ltd.	196.55	NA
Star Health and Allied Insurance Co. Ltd.	87.06	65
STANDALONE HEALTH INSURERS AVERAGE	79.06	61.44
GRAND AVERAGE	105.68	87.27

Significance of claim settlement ratio when choosing an insurer

The Claim Settlement Ratio (CSR) is a critical metric for evaluating an insurance company's reliability and effectiveness, especially in the world of health insurance. This ratio measures the percentage of claims that an insurer has settled compared to the total number of claims received within a financial year and serves as a direct indicator of the company's commitment to its policyholders.

A high CSR affects not only the insurer's operational efficiency but also its financial health, suggesting that it has adequate resources to cover claims. For policyholders, this is reassuring as it reduces the risk of disputes or delays in receiving claim payments, which can be crucial during medical emergencies or financial distress.

This is particularly important in markets like health insurance, where the stakes are high, and the timing of claim settlement can significantly affect the quality and accessibility of medical treatment. So, evaluating CSR provides prospective policyholders with a clearer picture of what to expect from their insurer (in terms of service reliability) and can help them arrive at an informed conclusion that aligns with their needs for coverage and support.

Facets To Understand Claim Settlement Ratio in Health Insurance

Here's a breakdown of the key aspects to keep in mind:

How CSR is Calculated

The Claim Settlement Ratio is determined using a straightforward formula:
Claim Settlement Ratio = (Total claims settled or paid) / (Total claims received + Outstanding claims at the beginning of the year).

This calculation helps you assess which insurers have a strong track record of settling claims. For instance, companies like IFFCO Tokio and Care Health Insurance have been noted for their high CSRs, which enhances their trustworthiness among consumers.

Importance of Consistency

When analysing an insurer, looking at their CSR over multiple years is beneficial. Consistently high performance in settling claims indicates an insurer's reliability and operational stability, making it a preferable choice for consumers.

Volume of Claims

Observing the number of claims an insurer receives annually can also provide insight into its scale and presence in the market. A higher volume of claims might indicate a more prominent, more established insurer, which could influence your decision when choosing a provider.

Top reasons why claims get rejected

There are several common reasons why health insurance claims might get rejected by insurers:

Fraudulent Claims

If a claim is found to be deceitful or misleading, it's likely to be turned down. This could happen if the policyholder misrepresented or intentionally misrepresented the information.

Exclusions Specified in the Policy

Every health plan has specific exclusions, conditions, or treatments not covered under the policy. Claims that fall under these exclusions are typically rejected.

Expired Policies

Submitting a claim against an expired policy will result in rejection since the insurance cover is no longer valid.

Non-Covered Treatments

The claim for such treatments will be denied if the treatment received is not included in the health plan's list of covered medical services.

Pre-existing Conditions

Your claim may be rejected if you seek treatment for a pre-existing condition before completing the waiting period defined in your policy terms.