Formula to Calculate the Claim Settlement Ratio

So, now that you know what the claim settlement ratio is, let’s find out how you calculate it. But is there a formula that’s used to calculate this metric? Well, since this is essentially a ratio, there is a universal formula that is used to compute the CSR. 

 

Take a look at the claim settlement ratio formula below:

The claim settlement ratio is always expressed as a percentage. So, it effectively tells you the percentage of claims settled by the insurance company. Claim settlement ratio of insurance companies is calculated using the formula given above. To better understand this, let’s take up an example to calculate the CSR. Consider the following data. 

 

Let’s say an insurance company receives 1 lakh claims during a financial year. Of these, they settle 95,000 claims during the year. Given this data, here is how the claim settlement ratio will be calculated.

So, as you can see, this insurance company’s claim settlement ratio for the given financial year is 95%.

The Claims Settlement Ratio of Different Health Insurance Providers in India

The Insurance Regulatory and Development Authority of India (IRDAI) is the apex regulatory body for insurance in the country. Every financial year, the IRDAI calculates and issues the claim settlement ratio for each insurance company in India.

 

This is a reliable source of information for anyone who is looking for information on the CSR of health insurance providers in India. Here is a closer look at the claim settlement ratio by IRDA for health insurance companies as issued by the IRDAI for 2019-20. 

What is a Good Claim Settlement Ratio?

When it comes to the claim settlement ratio, the general thumb rule is that the higher the ratio, the better it is for you. A higher ratio indicates that the insurance company promptly settles a majority of the claims they receive, and this is always a relief for you and your nominees.

 

On the other hand, a lower claim settlement ratio indicates that a larger portion of the claims received remain unapproved or unsettled. This could be because the claim applicants provided insufficient information, or because some of the claims may have been fraudulent. However, it could also point to the insurer’s inability to settle claims on time. So, it is always advisable to opt for an insurance provider with a higher claim settlement ratio. A claim settlement ratio of over 85% is considered good.

Why is a Claim Settlement of Health Insurance Important?

As a buyer, you may be wondering why this ratio is so important in the decision-making process. The claim settlement ratio is a vital factor that helps you pick the right health insurance provider. After all, the reason you have Health Insurance or any kind of insurance is so that you can rely on the financial cushion the policy offers, isn’t it? So, when the insured incident occurs, you need to have a reliable insurer who can step in and take care of the financial payouts promptly.

 

For instance, if you have a health insurance plan, and you unexpectedly meet with an accident that requires an extended stay at the hospital. You are not worried about the cost of hospitalisation because your insurance plan covers these expenses. So, you reach out to your insurer and raise a claim as per the due procedure.

 

The bottom line is that the claim settlement ratio is important because it helps you choose an insurer you can rely on. So, when you are shopping for an insurance plan, you can shortlist insurers who offer plans that meet your requirements. Then, from among those options, you can select the insurance provider with the highest claim settlement ratio.

 

The bottom line is that the claim settlement ratio is important because it helps you choose an insurer you can rely on. So, when you are shopping for an insurance plan, you can shortlist insurers who offer plans that meet your requirements. Then, from among those options, you can select the insurance provider with the highest claim settlement ratio.

Top Health Insurance Plans With Good Claim Settlement Ratio

The claim settlement ratio represents the dependability of the health insurance company if you make a claim. Given below is a list of the best insurance plans offered by the top health insurance companies in India in 2021

How Long Does it Take to Get the Claim Payout?

This is quite subjective, and it depends on a number of factors such as the nature of the claim, the health insurance provider’s terms and conditions, the paperwork you submit and the accuracy and completeness of the details you submit to your health insurer.

 

Typically, however, most health insurance providers settle their claims and make the payouts within a week of receiving all the relevant documents. That said, it generally does not take more than 30 days for the claim payouts to be made.

What are the Steps for Registering a Claim?

The health insurance claim process with your insurance provider may vary from one insurance company to another. They also depend on whether you opt for a cashless claim settlement or a reimbursement claim.

 

Broadly speaking, these are the steps involved in both these cases.

 

Option 1: In case of a cashless claim settlement

 

1. Visit a network hospital associated with your insurance provider

2. Submit the details of your policy and fill in the pre-authorization form

3. The insurer then verifies your form, while the hospital is intimated about your policy details

4. After the course of your treatment is over, at the time of discharge, the network hospital submits the bills and the discharge papers to your insurer

5. The insurer then directly settles the bill amount with the hospital, after accounting for any deductibles or copayments.

Option 2: In case of a reimbursement claim

 

1. Here, after you have been discharged, you need to submit the hospital bills and other medical documents as needed.

2. Then, the insurer will verify the details and reach out to you in case they need any additional information.

3. Once all the paperwork is submitted, the insurer assesses your claim request.

4. If it’s found satisfactory, the insurer will reimburse the claim amount to you as per the terms and conditions of your health insurance plan.

What are the Mandatory Documents Required for the Claims Process?

Like the steps involved in registering a claim, the documents you need to submit may also vary slightly from one health insurance provider to another. However, to raise a claim with your health insurer, these are the mandatory documents that are generally required:

 

• Duly filled claim form

• A medical certificate from a qualified medical professional

• The original copy of the discharge summary provided by the hospital

• The prescriptions provided during the course of treatment

• The cash invoices given by the pharmacies and hospitals involved

• An investigation report by the concerned doctor

• A copy of the FIR or the Medico Legal Certificate (MLC) in case of accidents