Health insurance companies and claim settlement ratio

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).

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.