Health Insurance Claim settlement ratio is one of the most vital metrics to determine if a certain insurer and policy are right for you.
It is calculated by = Total number of insurance claims settled / Total number of claims filed
The Insurance Regulatory and Development Authority of India (IRDA) publishes a list of claim settlement details of health insurance companies for the public every financial year. One can use the information from IRDA’s health insurance claim settlement ratio to choose an insurer with a proven track record of settling claims yearly.
A claim can be denied, especially when there are some red flags in the policy draft or violations by a policyholder. However, these should be exceptions, and a diligent insurer should have a high claim settlement percentage.
A higher claim settlement percentage means that your health insurance will cover you financially during medical emergencies. Your health insurance provider needs to offer quick disbursal of funds and cashless facilities for your timely treatment.
The following points detail why a health insurance’s claim settlement ratio is so important.
A health insurance’s claim settlement ratio can be calculated using a simple formula:
If an insurer has received 100,000 claims in a financial year and settled 99,000 claims while rejecting 1000 claims, their CSR is:
CSR = (90,000/100,000) % = (0.9X100) % = 90%
Following are a few key factors to consider while looking at a health insurance’s claim settlement ratio:
It’s far more difficult for the larger insurance agencies to fulfil all claims, simply because they get a lot of them.
A larger number of claims tell us that the insurance company is old and established in their business. Having a high CSR ratio and a larger number of claims makes an insurance company even better.
The CSR ratio refers to the number of claims settled for all insurance products of a company put together. This means that the ratio will reflect claims processed for all policies and policy types of a company – whether it’s general insurance, health insurance, or life insurance.
The Insurance Brokers Association of India (IBAI) publishes the claim settlement ratio of all health insurance companies in its General Insurance Claim Insights every year. The report published on its official website shows the data for all private and public insurance companies. You can also view the same information on the annual report of IRDA’s claim settlement ratio of health insurance companies.
You should check the CSR ratio of a company for a long time before choosing to buy health insurance. Opt for an insurance policy if the company has a high CSR ratio for the past five years.
A reliable insurance company will honour all eligible claims and process them most swiftly. So, the higher the claim ratio of health insurance, the better will be the insurance company. It also indicates that the company has its finances in order, as it can easily pay the claim amount of a high number of claimants.
Generally, a settlement percentage of 85% to 95% is considered a good CSR for insurance companies.
With the Navi health insurance app, you can enjoy a Claim Settlement Ratio of 97% for cashless claims across a network of 10,000+ cashless hospitals.
This is the ratio between net incurred claims to the net premium received by the insurance company. It tells you what percentage of its income an insurance company pays towards settling claims. A lower number indicates that the insurer has very strict claims processing or charges a very high premium.
The claim pending ratio gives information regarding the percentage of outstanding claims of an insurer against the total claims they have received.
This ratio provides information about the percentage of rejected claims over the total number of claims.
Even if an insurer has 90% to 95% CSR, having a high claim processing time means that the claimant will have to wait for a long time. This would make for terrible health insurance as the claimant will want funds during an emergency.
A health insurance’s claim settlement ratio provides an easy metric for potential buyers to judge the insurer. However, it is not the only metric one should judge an insurance company on. Buyers should also take note of other factors such as how long the company takes to process claims, hospital network coverage, plan benefits, and more.
Ans: You can check the CSR ratio of all insurance companies in the annual report released on IRDA’s official website.
Ans: Most insurance companies process and approve legitimate claims without any hassle. However, they can reject claims if they discover that you have pre-existing conditions or if your treatment is excluded in the policy.
Ans: Yes. Health insurances come with a time limit to apply for a claim to mitigate the chances of fraudulent practices.
How about an affordable health insurance policy 👨⚕️ starting at a monthly premium of just ₹235? Install the Navi app now and get your policy in under 2 minutes.
Disclaimer: This article has been prepared on the basis of internal data, publicly available information and other sources believed to be reliable. The information contained in this article is for general purposes only and not a complete disclosure of every material fact. It should not be construed as investment advice to any party. The article does not warrant the completeness or accuracy of the information, and disclaims all liabilities, losses and damages arising out of the use of this information. Readers shall be fully liable/responsible for any decision taken on the basis of this article.
6 Best Critical Illness Insurance Companies in India to Invest in February 2023
Critical illness insurance is a type of health insurance policy that protects against fatal illness... Read More »10 Best Cashless Network Hospitals in India 2023 – Benefits and Claim Process
Cashless Network hospitals are accredited hospitals that have partnered with a health insurance com... Read More »TPA in Health Insurance – Full Form, Functions and Roles
TPA (full form – Third Party Administrator) is a licensed intermediary between health insurance p... Read More »10 Best Cashless Health Insurance Plans in 2023 – Tax Benefits and Coverage
Considering the rising medical expenses, it is important to obtain health insurance for yourself an... Read More »Top-up Health Insurance Premium Calculator -How to Use & its Benefits
Are you looking to compare top-up health insurance policies online? A top-up health insurance premi... Read More »What is Group Insurance Policy – Best Group Health Insurance Plans
Group medical insurance policies are specially designed to provide financial coverage to a particul... Read More »What are Individual Health Insurance Plans – Benefits and Cover
The COVID-19 pandemic demonstrated how unprepared most people are in the face of a major health cri... Read More »Corona Insurance Policy (2023) – Types, Cover and How To Claim
Corona Insurance policy provides coverage for all medical and hospitalisation expenses incurred due... Read More »What is a Cardiac Health Insurance Policy – Benefits and Diseases Covered
In cardiac health insurance policies, insured individuals get financial coverage to treat heart dis... Read More »What is Cashless Mediclaim Policy – Working, Features & How to Claim
A cashless Mediclaim policy provides much-needed financial aid during medical emergencies. Policyho... Read More »What is Mental Illness Cover in Health Insurance – Benefits and Why it is Necessary
Earlier, health insurance companies in India covered only physical illnesses in their health insura... Read More »Group Personal Accident Insurance – Inclusions, Exclusions and Documents Required
Mr Sharma is an owner of a company. He’s looking to insure his employees against unexpected medic... Read More »Top 10 Chit Fund Schemes in India in 2023
Chit funds are one of the most popular return-generating saving schemes in India. It is a financial... Read More »10 Best Gold ETFs to Invest in India in February 2023
Gold ETFs or Gold Exchange Traded Funds are passively managed funds that track the price of physica... Read More »Top 10 Demat Accounts in India [Lowest Brokerage Charges]
A Demat account was created to eliminate the time-consuming and inconvenient procedure of purchasin... Read More »20 Best Index Funds in India to Invest in 2023 (Updated on 31st Jan)
What is an Index Fund? An index fund is a type of mutual fund or exchange-traded fund (ETF) that... Read More »Best Arbitrage Mutual Funds to Invest in India: Returns and Taxation
Arbitrage funds are hybrid mutual fund schemes that aim to make low-risk profits by buying and sell... Read More »Best SIP Mutual Funds To Invest In India (2023) – Its Types And Taxation
A Systematic Investment Plan (SIP) is a convenient way to invest a fixed sum in mutual funds. For i... Read More »10 Best Corporate Bond Funds in India 2023 – With Returns
Corporate bond funds are debt funds that invest at least 80% of the investment corpus in companies ... Read More »10 Best Banks for Savings Account in India (2023)
A savings account keeps your money safe, and lets you earn interest every quarter. There are many b... Read More »All information is subject to specific conditions | © 2023 Navi Technologies Ltd. All rights are reserved.
Insuring health was never this affordable!
Monthly premium starting @₹235