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What is the Claim Settlement Ratio?
The Claim Settlement Ratio (CSR) is the percentage of health insurance claims that an insurer settled out of the total claims received in a financial year.
CSR = (Number of claims settled ÷ Total claims received) × 100
A CSR of 97% means the insurer settled 97 out of every 100 claims filed. For group health insurance buyers, this number reflects how reliably an insurer pays claims — which directly affects the experience your employees have during hospitalisations.
IRDAI publishes CSR data annually in its Annual Report and through periodic insurer disclosures. You can find this data at irdai.gov.in.
How to read CSR for corporate cover
- Above 95%: strong, consistent claims performance. This is the benchmark for quality group health insurers in FY 2024-25.
- 90–95%: acceptable, but worth examining 3-year trends and grievance data before committing.
- Below 90%: a red flag, particularly if the trend is declining. A higher proportion of your employees’ claims may face delays or rejections.
One important note: CSR alone doesn’t tell you how quickly claims are settled. The IRDAI Master Circular of May 2024 mandates cashless pre-authorisation within one hour and discharge approval within three hours. For reimbursement claims, settlement must happen within 30 days. When evaluating insurers, look at median settlement time alongside CSR.
What is the Incurred Claims Ratio?
The Incurred Claims Ratio (ICR) is the percentage of total premium collected that an insurer paid out as claims in a given financial year.
ICR = (Value of claims paid ÷ Value of premiums received) × 100
An ICR of 80% means the insurer paid ₹80 in claims for every ₹100 it collected as premium. Unlike CSR, which counts claim volume, ICR measures claim value — making it a useful indicator of an insurer’s financial position and underwriting discipline.
How to read ICR
- 70–90%: the range most insurance experts consider balanced. The insurer is paying claims reliably while remaining financially stable.
- Below 70%: can indicate overly conservative claim approvals or restrictive underwriting. A low ICR isn’t automatically good for policyholders.
- Above 90–100%: puts pressure on insurer finances and can lead to premium hikes at renewal. Sustained ratios above 100% signal financial stress.
- Consistently above 100%: the insurer is paying more in claims than it collects in premium. For private insurers, this is not sustainable over time.
CSR vs ICR: what each actually tells you
These two ratios measure different things and neither replaces the other.
For group health insurance decisions, look at both together. An insurer with a high CSR but an ICR above 95% may face pricing pressure at your next renewal. An insurer with a low ICR but a declining CSR may be tightening claims practices.
FY 2024-25 data: CSR and ICR for major insurers
The IRDAI Annual Report for FY 2024-25 covers 3.26 crore health insurance claims with a total payout of ₹94,247 crore. The industry-wide ICR for non-life insurance stood at 82.88%.
Claim Settlement Ratio — selected insurers, FY 2024-25
Source: IRDAI public disclosures, FY 2024-25; 3-year average data via Ditto’s analysis of NL-37 filings
Incurred Claims Ratio — private general insurers, health segment, FY 2024-25
Source: IRDAI Annual Report FY 2024-25, via Business Standard (January 2026)
Public sector insurers reported higher ratios: New India Assurance at 100.98%, Oriental Insurance at 102.58%, and National Insurance at 96.05%.
For standalone health insurers, the overall ICR was 68.06% in FY 2024-25 (IRDAI Annual Report, via Outlook Money). The sector-wide CSR for standalone health insurers was 99.93%.
How does this affect your group health insurance decision?
- Use CSR to shortlist. For corporate cover, prioritise insurers with a CSR consistently above 95% over three years. A single strong year is less meaningful than a stable trend.
- Use ICR to assess sustainability. If you’re renewing cover annually, an insurer with a high ICR may push premium increases at renewal. A balanced ICR (70–90%) suggests the insurer is pricing cover sustainably.
- Don’t ignore settlement speed. Since the IRDAI Master Circular of May 2024, cashless pre-authorisation within one hour is a regulatory requirement — not a differentiator. Ask your broker for median pre-auth TAT across your shortlisted insurers before deciding.
- Check the 3-year trend, not just the latest year. A single year of strong performance can reflect a low-claims period rather than genuine underwriting quality. Look at the trajectory over FY 2022-23, FY 2023-24, and FY 2024-25.
Where to find CSR and ICR data
IRDAI publishes insurer-wise CSR and ICR data in its Annual Report, available at irdai.gov.in. The Insurance Brokers Association of India (IBAI) also releases General Insurance Claim Insights annually, which covers claim settlement performance across insurers. Individual insurer public disclosures (Form NL-37) contain quarterly claims data and are published on each insurer’s website.
Frequently asked questions
Does a high ICR mean the insurer is better at paying claims?
No. ICR measures the ratio of claims paid to premiums collected — it reflects financial outflow, not claim approval rates. CSR is the metric that tells you what percentage of claims get settled. A high ICR with a low CSR can mean an insurer pays large claims but rejects a significant number of smaller ones.
Do exclusions in a group policy affect CSR and ICR?
Yes. Policy exclusions reduce the number of claims an insurer is required to pay, which can improve CSR and lower ICR. This is why evaluating policy terms — room rent sub-limits, disease-wise caps, waiting periods — alongside aggregate ratios is important.
Can CSR and ICR vary across plan types within the same insurer?
Yes. A group mediclaim plan and an individual plan from the same insurer can have different CSR and ICR profiles, because the risk pool, claim frequency, and policy terms differ. Where possible, ask your broker for group-specific data from the insurer.
How should companies evaluate these metrics as part of a broader benefits decision?
CSR and ICR are starting filters, not final verdicts. Layer them with cashless hospital network coverage in your employees’ cities, pre-auth turnaround time, maternity and OPD coverage terms, and premium stability over the past two renewal cycles.
