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Health insurance is one of the most important financial shields that everyone must have to keep their financial stability intact in times of emergencies. The awareness about the importance of health insurance, especially group health insurance, has increased in today’s post-covid era. The pandemic has made us realize how important it is to own a health insurance policy to ensure access to quality healthcare for ourselves and our loved ones.

Today, individuals are giving a greater weightage to companies that offer them and their families the benefits of a group medical insurance cover. Thus, to attract and retain good talent in your company, you must ensure that your employees are provided with a group mediclaim insurance plan that meets their medical requirements in the best possible manner.

The two most important factors which you must consider while selecting a group health insurance for your employees are the Claim Settlement Ratio (CSR) and the Incurred Claims Ratio (ICR). These two ratios tell you significantly about the claim meeting ability of the insurance provider, which in turn affects the ease which your employees will experience at the time of a health insurance claim settlement.

What is the Claim Settlement Ratio? ?‍?

Claim Settlement Ratio (CSR) refers to the number of claims which have been settled by an insurance provider out of the total number of claims received by it in a particular financial year. It speaks about the ability of an insurance provider to settle the raised health insurance claim. Thus, the higher the CSR, the better it is. 

Claim Settlement Ratio = (Number of Claims Settled / Number of Claims Received) * 100

What is the Incurred Claims Ratio? ?‍?

Incurred Claims Ratio (ICR) refers to the ratio between the value of the claims paid by an insurance provider to the value of the premiums received by it in a particular financial year. It is a direct reflection of the operational efficiency of the health insurance provider and its ability to pay for the raised claims. By the very virtue of it, the higher the ICR, the better it is. 

However, if you come across a health insurance provider, which features an incurred claims ratio of more than 100%, then it is better not to go with it. This is because an ICR of more than 100% means that the insurance provider has paid a value greater than what it has received in terms of premiums, and is thus suffering a loss.

Incurred Claims Ratio = (Value of Claims Paid / Value of Premiums Received) * 100

Which is Better - CSR ? ICR?

After knowing about the meaning of these two ratios, you must be wondering which one is better for your employees. Well, the answer to that is incurred claims ratio. This is because Incurred Claims Ratio represents the percentage of the amount paid by a group health insurance provider in the form of claims out of the total amount received by it as premiums in a said financial year. 

Whereas the claim settlement ratio only helps us deduce how many of the health insurance claims were settled by the insurance company, that is, how many were either paid or rejected by it out of the total health insurance claims it received in a particular year. 

Where can the CSR and ICR of Different Insurance Companies be Found?

You can find the claim settlement ratio and the incurred claims ratio of different insurance companies in the IRDAI’s annual report as well as in the ​​General Insurance Claim Insights released on an annual basis by the Insurance Brokers Association of India (IBAI).

CSR and ICR of Health Insurance Providers in India 

Insurance CompanyClaim Settlement Ratio FY20Incurred Claims Ratio FY20IFFCO Tokio General Insurance96.33%95.66%Care Health Insurance (Erstwhile Religare Health Insurance)95.47%59.13%Magma HDI Health Insurance95.17%72.87%The Oriental Insurance Company93.96%104.97%New India General Insurance92.68%100.83%Bajaj Allianz General Insurance 92.24%81.96%Max Bupa Health Insurance89.46%53.51%Navi General Insurance86.98%34.69%HDFC ERGO Health Insurance86.52%73.69%Shriram General InsuranceN/A 96.64%Manipal Cigna Health Insurance   85.72%61.64%Edelweiss General Insurance85.57%113.05%National Insurance Company83.78%103.30%Future Generali General Insurance82.96%62.52%Royal Sundaram General Insurance81.50%63.55%Liberty General Insurance81.03%87.78%ICICI Lombard General Insurance78.67%69.90%Star Health Insurance78.62%65.91%United India Insurance Company78.03%104.24%Reliance Health Insurance76.43%62.17%Tata AIG General Insurance76.04%66.61%Bharti AXA General Insurance76.01%77.50%Kotak Mahindra General Insurance75.45%49.22%Raheja QBE General InsuranceN/A85.07%Acko General Insurance74.09%21.08%Aditya Birla Health Insurance70.81%49.08%Universal Sompo General Insurance70.75%76.68%SBI General Insurance66.08%50.54%

Source: IRDAI Annual Report 2019-2020; IBAI’s General Insurance Claim Insights - 5th Edition.


Q. How do specific exclusions or limitations in a group health insurance policy affect the Claim Settlement Ratio (CSR) and the Incurred Claims Ratio (ICR)?

A. Exclusions or limitations can lower the CSR and ICR by reducing the number of claims paid. Therefore, understanding policy details is crucial for evaluating an insurer's performance accurately.

Q. Can the Claim Settlement Ratio and Incurred Claims Ratio vary significantly between different types of health insurance plans offered by the same insurer?

A. Yes, CSR and ICR can vary across different plans from the same insurer due to plan-specific features and customer demographics. Therefore, assessing ratios for the specific plan of interest is advisable.

Q. How should companies evaluate the CSR and ICR in the context of the overall benefits package offered by a health insurance provider?

A. Companies should consider CSR and ICR alongside coverage options, premium costs, and additional benefits. Therefore, a balanced approach ensures a comprehensive evaluation of the insurer's value proposition.

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