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The ICR is the ratio of total value of all the claims settled by an insurer to the total value of all the premiums collected by the insurance company during a specified period of time. In simple terms, incurred claim ratio settlement tells us about the ability of the insurance company to pay a claim. 


An incurred claim ratio of 50% to 100% is generally considered the most optimal claim settlement ratio and is a good indicator that the insurance company is providing a good product and taking efforts to educate its subscribers regarding claim processes. 

How to Read Incurred Claim Ratios?

Claim Ratio in Health Insurance signifies the financial health of a company. An insurance company showing the best claim ratio in health insurance means the company is doing well. Let us take a look at the incurred claim ratio value and what it denotes.

  • Incurred Claim Ratio of Health Insurance Company Is More Than 100%

What if the  incurred claim ratio is above 100%? A ratio above 100% indicates that the insurance company is not in a good position. It means the insurer has spent a considerable amount settling claims versus the amount it collected in health insurance premiums

Financially, these numbers are loss-making. This ICR bandwidth is not sustainable for the company. They will be facing losses and will start rejecting claims soon. These insurance companies will have to take drastic steps to recover from this situation.

  • Incurred claim ratio of the health insurance company is less than 50%

If the ICR is less than 50%, it indicates that the insurance company favours its own business over claim settlement. The company is earning high benefits, but it is not favourable toward its policyholders. The claim settlement will amount to 0-50% of the total premiums received in a single year i.e. the company has received a lot more premium than the claims it has been paying out.

The health insurance claim process will likely be less transparent and the cost of the policy will be on the higher side. The chances of claim rejection will be high as the policy may have a lot of exceptions.

  • Incurred claim ratio of the health insurance company is more than 50% and less than 100%

If the ICR is between 50 and 100%, it signifies that the insurance company is financially stable. The insurer can easily manage the insurance claim settlements using the total premiums received in the year. This is an ideal situation for the health insurance company and the policyholders.

The insurance policy will be affordable and the claim settlement process will be more transparent. The policy will have a good set of features and the exceptions will not be too stringent. The claim settlement process will be easy and the policyholders will be mostly happy.


The ideal range of the  incurred claim ratio is between 70% to 90%.

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How to Calculate Incurred Claim Ratio in Health Insurance

Now, you may have understood the Incurred Claim Ratio meaning. So, let us learn how to calculate the Incurred Claim Ratio:


ICR = Net Claims Incurred / Net Earned Premium


Let us consider the following example to understand the formula better.


Consider that the insurance company you are planning to buy health insurance from has an  incurred claim ratio of 95%. The premium is ₹100. The 95% ICR means that the insurance company will use ₹95 for settling claims out of every ₹ 100 the company receives as a premium payment. Therefore, the profit of the company will be ₹5

List of Health Insurance Plans with a Healthy Incurred Claim Ratios

Explore and choose from an expansive range of health insurance plans on Bajaj Markets. Here are some of them with a good incurred claim ratio:

Name of the Plan

Best Features 

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Bajaj Allianz Health Insurance

  • Bajaj Allianz offers cashless treatment at over 8,000 hospitals

  • An in-house health administration team helps speed up all procedures

  • Incurred claim ratio- 81.96%




Aditya Birla Health Insurance

  • The company has a strong family of over 10 million customers

  • Access to a robust network of over 10,000 hospitals

  • Incurred claim ratio - 49.08%




Care Health Insurance

  • Immediate access to treatment at over 19,000 hospitals

  • Get cashless claim approval in 2 hours

  • Incurred claim ratio - 55%



Things to Consider Before Getting a Health Insurance Plan

We’ve discussed ICR and how it affects health insurance claims. Hence, it’s critical that you compare and contrast ICR before purchasing a health insurance plan. That being said, it’s important to also look at a few other factors before settling on a health insurance plan. Here are a few factors worth considering before making a purchase decision. 

  • Claim Settlement Time
    You should check the claim settlement time of the company you choose. Even if the insurer has a high ICR, it may take more than six months to process the claim. Such a scenario is not favourable.

  • New Entrants
    Since  incurred claim ratio is a ratio, a low denominator will show a high quotient value. If a new insurance company in the market has collected a lower number of premiums in the initial years, it may indicate a comparatively higher ICR. There is nothing to be concerned about because they may have witnessed many claims in the initial years.

  • Type of Insurance Products
    An insurance company will have different products like health insurance, life insurance, motor insurance, etc. The overall  incurred claim ratio will be an average of them. Hence, keep in mind that the ICR you see may be of the health insurance alone or the overall average.

Difference Between Incurred Claim Ratio and Claim Settlement Ratio

As discussed earlier, ICR is the ratio between the net claims incurred and net premiums collected. In contrast, Claim Settlement Ratio in health insurance or CSR is the number of claims received, and the number of claims settled in a financial year. You can't use them interchangeably.


ICR has a broader scope compared to CSR. CSR is only concerned with the claim settlement. For example, if an insurance company has a claim settlement ratio of 90%, they have settled 90% of their claims in the year, while the remaining 10%, are either rejected or pending.


Choose health insurance wisely for yourself and your family members. An insurance provider with a good ICR will be trustworthy so that you can trust it for long-term investment.

Health Insurance Plans Available at Bajaj Markets

FAQs on Incurred Claim Ratio

What is the ideal incurred claim ratio for health insurance?

The ideal ratio for health insurance is between 70% and 90%. It is best to choose an insurer falling in this range when buying health insurance in India.

What is the significance of incurred claim ratio in health insurance?

 In simple terms, the incurred claim ratio tells us the insurer’s ability to settle the claims received.

Should I buy health insurance based on the incurred claim ratio of the insurer?

ICR is one of the deciding factors when buying health insurance in India. However, it cannot be the only determining aspect. The affordability of the policy, the claim settlement ratio of the insurer, features, benefits, and exclusions collectively help you decide the right health insurance plan for you and your family.

Does the calculation of ICR depend on the age of the health insurance provider?

Yes, start-up health insurance providers take time to establish their presence in the insurance sector. Therefore, building equity around the incurred claim ratio would take time.

Where can I find the ICR of a health insurance provider?

The information regarding the incurred claim ratio for different insurers in India is readily available in the annual reports on the IRDAI website.

My health insurance provider has a low ICR. Should I switch my insurer?

At the time of choosing a health insurance plan, it is recommended that you pick a trustworthy and reliable company. A higher incurred claim ratio signifies the trustworthiness and financial stability of the company. However, if your company has a low ICR, you always have the option to port out to a different insurer. Weigh all the pros and cons and then make a decision. 

Is it good to select a health insurance provider that has an incurred claim ratio of more than 100%?

No, choosing an insurer with an ICR above 100% is not recommended. In business, these numbers imply loss-making. This incurred claim ratio bandwidth is not sustainable for a company. Even if the company is offering a more affordable premium rate, you may incur trouble at the time of claim settlement.

Does the ICR remain stable?

When the Incurred Claim Ratio of the insurance company is between 50% to 100%, it may be taken as an indication of its financial stability. In most cases, the company would be able to sustain claim settlements. 

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