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What is claim settlement ratio?

An insurance claim settlement ratio is the ratio between the number of claims settled to the number of claims made in a financial year by an insurance company. Life insurers and health insurers have separate claim settlement ratio. Buyers, including HRs and founders prefer an insurance company with higher claim settlement ration.

How to calculate claim settlement ratio?

The Claim Settlement Ratio (CSR) is calculated as follows

Claim settlement ratio = Number of claims settled/Number of claims made*100

For example, let us assume an insurance company has a CSR of 80%. This means that for every 100 claims received by the insurance company, 80 claims are settled and 20 claims are not. Unsettled claims are the claims that are in process.

The higher the percentage of CSR, the better the insurer. This applies to both health insurance and term insurance policies. Moreover, a claim settlement ratio is one of the authentic factors to look for regarding an insurance company to understand how efficiently claims are processed.

Health insurance claim settlement ratio - Who determines it?

Every year, the IRDAI (Insurance Regulatory and Development Authority of India) publishes a report which mentions the claim settlement details of all the 24 life insurance companies and 30 health insurance companies in India. The report includes all the details regarding the number of claims made by customers, the number of claims that were settled by the insurers, and the number of claims that were rejected during the financial year of an insurance company.

Significance of the claim ratio insurance companies

1. Reliability of the insurance company

Claim Settlement Ratio in an insurance company is an important factor to consider when choosing health insurance or a life insurance plan. It tells about the claim settling ability of your insurance provider. If your insurer is unable to settle the claims, then the purpose behind buying insurance goes useless. Hence, the CSR of an insurance company shows its reliability, which helps the customers in deciding the insurance company for policy purchase.

2. Consistency of the insurer

There should be consistency in the claim settlement ratio of an insurance company. Hence, while choosing an insurance company for an insurance plan, check for the claim ratio of the past 5 years. Choose the plan if the company has been consistent in settling claims throughout. This shows the capability of the insurance company to settle the claims.

3. Number of claims received by the insurer

While checking the claim ratio, we get to know the number of claims received by the insurer in a financial year. This gives us an estimate of how big and old the insurance company is.

Claim settlement ratio of health insurance companies 2022

Here is the IRDA claim settlement ratio (2019-20) of health insurance companies in India

Claim settlement ratio of public sector general insurers

The Oriental Insurance claim settlement ratio 93.96%
The New India Assurance claim settlement ratio 92.68%
National Insurance claim settlement ratio 83.78%
United India Insurance claim settlement ratio 78.03%

Claim settlement ratio of large private sector general insurers

IFFCO Tokio General Insurance claim settlement ratio 96.33%
Bajaj Allianz General Insurance claim settlement ratio 92.24%
HDFC Ergo General Insurance claim settlement ratio 86.52%
Future Generali India Insurance claim settlement ratio 82.96%
Royal Sundaram General Insurance claim settlement ratio 81.50%
ICICI Lombard General Insurance claim settlement ratio 78.67%
Reliance General Insurance claim settlement ratio 76.43%
Tata AIG General Insurance claim settlement ratio 76.04%
Bharti AXA General Insurance claim settlement ratio 76.01%
SBI General Insurance claim settlement ratio 66.08%

Claim settlement ratio of small private sector general insurers

Magma HDI General Insurance 95.17%
Navi General Insurance 86.98%
Edelweiss General Insurance 85.57%
Liberty Videocon General Insurance claim settlement ratio 81.03%
Kotak Mahindra General Insurance claim settlement ratio 75.45%
Acko General Insurance claim settlement ratio 74.09%
Universal Sompo General Insurance claim settlement ratio 70.75%
Go Digit General Insurance claim settlement ratio 63.56%
Cholamandalam MS General Insurance claim settlement ratio 56.25%

Claim settlement ratio of standalone health insurers

Care Health Insurance claim settlement ratio 95.47%
Niva Bupa Health Insurance claim settlement ratio 89.46%
ManipalCigna Health Insurance claim settlement ratio 85.72%
Star Health Insurance claim settlement ratio 78.62%
Aditya Birla Health Insurance claim settlement ratio 70.81%

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