Claim Settlement Ratio in Health Insurance

What is a Claim Settlement Ratio in Health Insurance?

Claim Settlement Ratio or CSR in health insurance is the percentage of the total number of claims settled by an insurance company against the total number of health insurance claims filed in a given financial year. It directly reflects how trustworthy a health insurance company is and how likely an insurance provider is to pay the claims received. A higher CSR means the insurer has a strong track record of settling claims, making it a more reliable choice for policyholders.

NOTE: The Insurance Regulatory and Development Authority of India (IRDAI) calculates and publishes the claim settlement ratios of all health insurance companies in its annual report.

How is Claim Settlement Ratio Calculated in Health Insurance?

The Claim Settlement Ratio is calculated by using the below-mentioned formula:

Claim Settlement Ratio = (Total Number of Claims Settled by the Health Insurance Company/ Total Number of Claims Received) X 100

For example, if 100 claims were received during a financial year, and the insurer was able to settle 94 claims out of them, then the claim settlement ratio of the health insurance company for that year will be: (94/100)x100 = 94% .

Every health insurance company in India has a claim settlement ratio. Usually, a claim settlement ratio above 85% is considered good in mediclaim insurance.

Latest Claim Settlement Ratio of Health Insurance Companies in India

Check out the claim settlement ratio and incurred claim ratio of health insurance companies in India:

*CSR Source: IRDAI Annual Report 2021-22
*ICR Source: IRDAI Annual Report 2023-24
*Disclaimer: The list mentioned is according to the alphabetical order of the insurance companies. Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by any insurer. This list of plans listed here comprise of insurance products offered by all the insurance partners of Policybazaar. For a complete list of insurers in India, refer to the Insurance Regulatory and Development Authority of India website, www.irdai.gov.in.
*NOTE: The Incurred Claim Ratio (ICR) in health insurance refers to the ratio of the total claim amount paid by a health insurance company against the total premiums collected in a financial year.

People also read: Claim Settlement Ratio vs Incurred Claim Ratio – Know the Difference

Importance of Claim Settlement Ratio in Health Insurance

Here are some of the reasons why checking the claim settlement ratio of the insurance company is important before buying a health policy:

1. Indicates Insurance Company’s Claims-Paying Ability

   The claim settlement ratio indicates a health insurance company’s ability to pay claims. If the insurer settles the claims received on time, the CSR would be good. A higher claim settlement ratio implies that the insurer has paid most of the claims received. For example, if an insurer has a claim settlement ratio of 80%, it means that the insurance company has settled 80 out of every 100 claims.

2. Measures Reliability of the Insurance Company

   The CSR can help you assess if a health insurance company will be reliable at the time of claim settlement. An insurer with a high CSR will be more likely to settle your claim than a company with a lower CSR. Thus, CSR can be used to decide which health insurance company is more dependable.

3. Checks Consistency of the Insurance Company

   The CSR can help you check the claim settlement trends of a health insurance company over the years. This can further help you check how consistently an insurer pays the claims filed by policyholders.

4. Helps to Compare Health Insurance Plans

   Claim settlement ratio is an excellent way of comparing health insurance plans before buying. You can compare the claim settlement ratios of different health insurance companies before finalising a medical insurance policy. For instance, if two mediclaim plans have similar coverage and premiums, then you can go for the insurer that has a better claim settlement ratio.

How to File a Claim with a Health Insurance Company?

There are two ways to file a claim with a health insurance company- cashless claims and reimbursement claims. Take a look at the process to file both types of health insurance claims below:

1. Cashless Claims:

   Cashless claims refer to the process where policyholders can receive treatment in any hospital of their choice without paying medical expenses out-of-pocket. Instead, the insurance company settles the bill directly with the hospital.

   To file a cashless claim, you need to:

   Step 1: Intimate the insurance company about your hospitalisation within 48 hours in case of emergency and at least 48 hours in advance in case of planned treatment..

   Step 2: Fill out the pre-authorisation form and submit it to the insurer/TPA.

   Step 3: The insurer will authorise your cashless treatment after verifying the documents.

   Step 4: Obtain the treatment and sign all the documents during discharge.

   Step 5: The health insurer will pay the bill amount directly to the hospital.

2. Reimbursement Claims:

   If the cashless claim is denied, policyholders can raise reimbursement claims under which they can obtain the treatment at a hospital and pay medical bills out-of-pocket initially and later raise a reimbursement request with the insurer.

   To file a reimbursement claim, you need to:

   Step 1: Intimate the insurance company at least 48 hours in advance in case of planned surgery and within 24 hours in case of emergency hospitalisation.

   Step 2: Obtain treatment and pay all the bills at the time of getting discharged from the hospital.

   Step 3: Collect the necessary documents from the hospital at the time of discharge.

   Step 4: Submit all the required documents to your insurer.

   Step 5: The insurer will verify all the submitted documents and reimburse you the claim amount in case of successful verification.

Factors to Consider While Evaluating Claim Settlement Ratio

Just looking at the CSR percentage is not enough when choosing a health insurance company. You need to evaluate multiple other factors listed below to ensure that the insurer is reliable and provides hassle-free claim settlements.

1. CSR Trends Over Time

   Instead of looking at the CSR for just one year, check how it has changed over the past few years. A company with a consistently high CSR is more reliable than one with fluctuating numbers.

2. Number of Claims Processed

   A high CSR can be misleading if the company has processed only a small number of claims. It is better to choose an insurer that not only has a high CSR but also handles a large volume of health insurance claims.

3. Speed of Claim Settlement

   Some companies may have a high CSR but take a long time to process claims, causing inconvenience. So, you must always look for insurers known for quick claim processing.

4. Claim Rejection and Pending Ratio

   A high claim rejection rate means the company frequently denies claims, possibly due to strict policies or hidden clauses. Similarly, a high pending ratio indicates delays in processing claims. Both these factors can cause financial burden, so it is better to choose an insurance provider with low rejection and pending rates.