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Incurred Claim Ratio - Important Factor to Choose a Health Insurer

By Finserv MARKETS - May 16,2019
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Incurred Claim Ratio - Important Factor to Choose a Health Insurer

There’s no denying the fact that buying a good health insurance policy takes a great deal of comparison and research. We compare the premium, the extent of coverage, the inclusions & exclusions, the claim settlement ratios and several other factors before buying a policy. The Incurred Claim Ratio is a little known yet important metric that can help you determine the ability of an insurer to honor claims successfully. This article explores everything you need to know about Incurred Claim Ratio:

What is Incurred Claim Ratio?

Incurred Claim Ratio or ICR indicates the ability of an insurance company to make successful claim settlements. If the ICR of an insurance company is more than 100%, it indicates that the amount of money given away as claim exceeds the amount collected as premium. Hence, companies who are in such a situation may be facing a financial crunch and may resort to rejecting some borderline claims, raise the price to better manage claims, or change their product altogether.

Ideally, the ICR of an insurance company should be between 70% and 90%. This indicates that the company makes profits by offering quality products and services. However, if the ICR is less than 50%, it means that the company is hardly giving out claims and generating considerable profits as a result. This, however, is not a good indicator as all health insurance companies should offer products that actually pay out claims within the correct limits.

What’s The Difference Between Incurred Claim Ratio and Claim Settlement Ratio?

Many policyholders tend to get confused between Incurred Claim Ratio and Claim Settlement Ratio. While they are closely related, they are different concepts altogether. Claim Settlement Ratio is the percentage of claims settled out of the total number of claims filed. However, at times, claims could get rejected due to poor documentation, lack of proof, or lack of adherence to deadline etc. Hence, the Claim Settlement Ratio may not really establish the credibility of a health insurer. On the other hand, the Incurred Claim Ratio indicates the net claims paid by an insurance company as against the net premiums earned. Therefore, it’s best to compare both factors to determine the quality of a health insurance provider.

Clearly, the Incurred Claim Ratio is an effective parameter for comparing insurance policies. However, it should not be the only factor determining your choice. If you want to end up with the right health insurance policy, it is also important to consider factors such as the reputation of the company, cashless hospital network, the time taken for claim settlement etc. At Finserv MARKETS, we offer health plans that will meet your requirement in every aspect. Besides having an ICR of 77.61%, you can get exclusive health insurance benefits like swift claim settlement, 6000+ cashless hospital network, and coverage up to Rs. 50 Lakh for a reasonable premium. To buy or know more about our Health Insurance plans, visit Finserv MARKETS today!

Read our top blogs to know more about health insurance in India:

“Finserv MARKETS, a subsidiary of Bajaj Finserv, is a one-stop digital marketplace that has been created for consumers on the go. It offers 500+ financial and lifestyle products, all at one place. At Finserv MARKETS, we understand that every individual is different. And that’s why we have invested in creating a proposition – Offers You Value. A value proposition that ensures you get offers which are tailor made for you. We also offer an amazing product range and unique set of online offers across Loans, Insurance, Investment, Payments and an exclusive EMI store. Be it in helping you achieve your financial life goals or offering you the latest gadgets, we strive to offer what you are looking for. From simple and fast loan application processes to seamless and hassle-free claim-settlements, from no cost EMIs to 4 hours product delivery, we works towards fulfilling all your personal and financial needs . What’s more! Now enjoy the same benefits in just one click with our Finserv MARKETS App.”


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Bajaj Finserv Direct Limited ("BFDL"), erstwhile Bajaj Financial Holdings Limited is a registered corporate agent of Bajaj Allianz Life Insurance Company Limited and Bajaj Allianz General Insurance Company Limited under the IRDAI composite registration number CA0551 valid till 10-Apr-2021. BFDL also renders services to Bajaj Finance Limited (‘BFL’) and Bajaj Housing Finance Limited (‘BHFL’) (referred hereinafter as ‘Lending Partner’) in sourcing of customers, providing preliminary credit support activities, fulfilment services and post-acquisition customer services related to lending business. Registered Office: Bajaj Auto Limited Complex, Mumbai – Pune Road, Akurdi, Pune – 411 035 CIN: U65923PN2014PLC150522