Health Insurance Claim Settlement Ratio

Know everything about claim settlement ratio, what it indicates, and how it helps you choose from different health insurance companies.
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3 mins
30-July-2023

When it comes to health insurance, one of the most important aspects that individuals must consider is the claim settlement ratio of the insurance company. This is the percentage of claims that an insurer settles every year compared to the total number of claims made. In other words, it indicates how efficient a health insurance company is in settling claims.

What is a ‘claim settlement ratio’ in health insurance?

The claim settlement ratio in health insurance is an essential factor in choosing the right health insurance policy. It gives customers an idea of how reliable the insurer is when it comes to handling claims. A high claim settlement ratio in health insurance indicates that the insurer addresses the claims made by the policyholders efficiently. A good claim settlement ratio also indicates that the health insurance company has a strong financial standing. This proves crucial in covering the costs of medical treatment.
Apart from the claim settlement ratio, there are two other ratios that one must consider; claim repudiation ratio and claim pending ratio.

Here's an example of how claim settlement ratio works:

  • Total number of claims filed: 1,000
  • Number of claims settled by the insurance company: 950
  • Number of claims not settled or rejected: 50

To calculate the claim settlement ratio:
Claim Settlement Ratio = (Number of claims settled / total number of claims filed) * 100
Claim settlement ratio = (950 / 1000) * 100

So, in this case, the claim settlement ratio becomes 95%.

Claim repudiation ratio

Claim repudiation ratio is the percentage of claims rejected by the insurer due to various reasons. Insurers reject the claims mostly because of fraud, non-disclosure of pre-existing medical conditions, or incorrect information provided by the customer.

Claim pending ratio

Claim pending ratio is the percentage of claims not settled by the insurance company within the standard timeframe.

What is the importance of a claim settlement ratio in health insurance?

The claim settlement ratio of health insurance companies is a very important factor in choosing a health insurance policy. Customers need to be aware of the insurer's claim settlement record. The claim settlement ratio in health insurance helps in understanding how much a customer can rely on the insurer when it comes to covering medical expenses. Hence, an insurance company with a high settlement ratio is considered trustworthy and reliable.

  • CSR plays a crucial role in evaluating the reliability and trustworthiness of health insurance providers.
  • A high CSR indicates that an insurance company is more likely to fulfil its promises in times of need.
  • It also shows that the company has a streamlined claims settlement process that is transparent, efficient, and customer-friendly.
  • When it comes to health insurance, a high CSR should be a top priority for policy buyers to ensure that their medical expenses are adequately covered without any hassle.

You can look for some of the best health insurance policies in India on Bajaj Finance Insurance Mall.

List of top health insurance companies with high claim settlement ratio in India

Here’s a quick view of some of the top health insurance companies and their claim ratio of health insurance companies, highlighting their effectiveness in settling claims and their reliability in covering medical expenses.

 

Insurance company name

Claim settlement ratio

Bajaj Allianz General Insurance

96.85%

ICICI Lombard General Insurance

97.10%

HDFC ERGO General Insurance

99.87%

Aditya Birla Health Insurance

94%

 

Health insurance claim settlement process

The health insurance claim settlement process involves a series of steps to ensure policyholders receive their entitled benefits. Initially, the policyholder files a claim with necessary documents. The insurer then reviews and processes the claim based on the policy terms. The claim settlement ratio in health insurance is a key indicator of how effectively an insurer manages these claims. A higher ratio suggests that the insurer is more efficient and reliable in settling claims, ensuring timely reimbursement and customer satisfaction.

How to check health insurance claim settlement ratio?

To check the health insurance claim settlement ratio, visit the Insurance Regulatory and Development Authority of India (IRDAI) website, where they publish annual reports and updates. You can also review the claim settlement ratios provided in insurers' annual reports or through comparison websites that track these metrics, offering insights into each insurer's efficiency in handling claims.

How do I read or understand the claim settlement ratio data?

Understanding the claim settlement ratio in health insurance data can seem like a daunting task, especially for new health insurance buyers. However, it is an essential aspect of choosing the right insurer for your health needs. Here's how you can understand the claim settlement ratio data:

You will find the health insurance claim settlement ratio given in percentage, as shown in the above table. This refers to the number of claims settled against the total number of claims received yearly. A high health insurance claim settlement ratio indicates that the insurer has a strong financial standing and settles the claims promptly.

You must compare health insurance on the basis of claim settlement ratio of various insurers and buy a health insurance policy to stay adequately covered during an emergency. You can access this data on the insurer’s website or by contacting them directly. You should also check the claim repudiation ratio and claim pending ratio of the insurance company to make a wise decision.

Frequently asked questions

What is a good claim settlement ratio for a health insurance company?

A good claim settlement ratio for a health insurance company should ideally be above 90%. This indicates that the insurer can settle the claims efficiently, as it has a strong financial holding.

What is the formula for calculating the claim settlement ratio?

The formula for claim settlement ratio is: (Total number of claims settled/Total number of claims received) x 100.

What is the best claim settlement ratio in health insurance?

There is no universal standard for the best claim settlement ratio in health insurance. But experts recommend buying health insurance from insurance companies that have a ratio above 95%.

What is the difference between a claim settlement ratio and the incurred claim ratio?

The claim settlement ratio refers to the percentage of claims that an insurer settles compared to the total number of claims received. The incurred claim ratio refers to the total value of claims paid by the insurer against the total premium collected. Both ratios are important factors to consider when choosing an insurer. The incurred claim ratio also considers the medical treatment cost and is an important indicator of the insurer’s ability to cover medical expenses.

How can I check the claim settlement ratio of a health insurance company published by the IRDA?

The IRDA publishes the claim settlement ratio of all insurance companies on its website. You can also find the ratio on the insurance company's website or ask the company directly for the information.

Where to check the claim settlement ratio of health insurance?

You can check the claim settlement ratio on the IRDAI website, in annual reports of insurance companies, or through financial comparison websites that list and analyse the ratios of different health insurers.

Which company has the highest claim settlement ratio?

The company with the highest claim settlement ratio can vary annually. Check the latest IRDAI reports or reputable financial comparison sites for the most current data on which insurer leads in claim settlement efficiency.

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