When it comes to choosing a health insurance policy, one of the vital factors to consider is the insurer’s claims settlement track record. The Insurance Regulatory and Development Authority of India (IRDAI) has published its annual report, which provides Incurred Claim Ratio (ICR) data for all health insurance companies. The ICR is the percentage of the total premium collected by an insurer that is spent on settling claims. In 2023-24, the ICR decreased to 88.15%, compared to 88.89% in 2022-23.
It’s essential to understand the difference between ICR and Claims Settlement Ratio (CSR). CSR measures the percentage of claims settled out of the total claims filed, while ICR measures the percentage of premium spent on settling claims. A low ICR could indicate that the insurer is conservative in settling claims, booking more profits, or rejecting many claims. On the other hand, a high ICR could indicate that the insurer is spending more on claim settlements than it collects in premiums, which can lead to financial instability.
IRDAI has only started sharing ICR data for health insurance companies since last year, making it a valuable tool for policyholders. The data can help policyholders gauge an insurer’s claims settlement record and make more informed decisions. For policyholders, an ideal ICR is between 80-100%, indicating a balanced approach to claims settlement.
The article provides a summary of the latest ICRs of various health insurance companies, including Acko, Bajaj Allianz, Chola Ms, Future General India, HDFC ERGO, ICICI Lombard, and more. Policyholders are advised to consider the ICR data along with other factors, such as the policy’s terms, conditions, exclusions, and features, to make a well-informed decision. By understanding the ICR, policyholders can reduce the risk of claim rejection and ensure that their health insurance policy is comprehensive and effective.