Health Insurance Claim Settlement Ratio & How is it Calculated?

Are you wondering what health insurance claim settlement ratio is and how it is calculated? Allow us to explain. A Claim Settlement Ratio or a CSR helps you gauge how reliable a health insurance provider is since it proves the percentage of claims the provider settles annually. This means that the higher the ratio, the better the health insurance provider is for you. 


The health insurance claim settlement ratio determines how promptly your insurance provider is, how easily you will be able to access your insurance coverage during an emergency, etc. This is very crucial for when unforeseen events befall you, and financial aid is an urgent and immediate requirement.

Health Insurance Claim Settlement Ratio

Health Insurance Claim Settlement Ratio

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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:

Claim Settlement Ratio =

(Total number of claims approved ÷ Total number of claims received) x 100

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.

Claim Settlement Ratio

= (Total number of claims approved ÷ Total number of claims received) x 100

= (95,000 ÷ 100,000) x 100

= 0.95 x 100

= 95%

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. 

Health Insurance Companies

Claims O/S at the beginning of 2019-2020

Claims booked during 2019-2020

Claims paid during 2019-2020

Claim Settlement Ratio

(% of claims paid settled within 3 months)

Care (Religare)

127,639

1,036,711

980,518

100.00%

Apollo Munich

21,446

475,055

434,133

99.99%

Manipal Cigna

1,637

223,936

193,395

99.96%

Max Bupa

1,983

145,353

132,750

99.91%

Star Health

42,280

1,092,692

892,369

99.90%

HDFC Ergo

120,286

1,481,221

1,446,143

99.80%

Edelweiss General

11

9,197

7,561

99.72%

Go Digit

1,612

194,499

163,170

99.65%

Aditya Birla

3,914

99,554

78,395

99.36%

Navi General

287

12,626

10,453

98.70%

Kotak Mahindra

1,383

50,083

39,797

98.62%

Bajaj Allianz

170,564

5,766,512

5,334,364

98.61%

Reliance

258,915

1,853,280

1,608,766

98.16%

Liberty

11,557

243,275

209,400

97.84%

SBI General

31,047

765,530

712,931

97.84%

Royal Sundaram

41,143

596,284

569,167

97.75%

Reliance Health

8

818

348

97.13%

ICICI Lombard

196,322

1,894,100

1,680,709

96.93%

Magma HDI

8,099

78,272

65,060

95.40%

Acko

2,544

195,695

147,942

93.49%

Future Generali

31,472

260,370

232,610

93.34%

Tata AIG

51,211

1,220,302

1,074,652

92.82%

Oriental

250,810

3,571,151

3,497,321

92.71%

Bharti AXA

29,208

308,361

273,481

92.17%

New India

309,506

5,812,400

5,730,150

91.99%

Cholamandalam

52,686

297,618

255,007

91.47%

United India

660,234

4,866,214

4,470,407

89.18%

Shriram General

56,343

250,572

203,841

87.53%

AIC

4,536,017

12,997,531

8,643,927

83.99%

IFFCO Tokio

72,712

1,097,565

1,082,533

81.67%

ECGC

592

2,006

553

53.35%

National

520,594

5,692,728

4,996,054

45.37%

Raheja QBE

489

862

416

30.29%

Universal Sompo

11,199

185,344

157,571

22.14%

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

Health Insurance Plan

Features

Claim Settlement Ratio(Less than 3 months)

Check Plans

 

 

 

 

Bajaj Allianz Criti Care Policy

  • The policy term ranges from one to three years

  • If the policy term is two years or three years, respectively, the policyholder may receive a discount of 4% and 8%

  • The sum insured is paid out in a lump sum, regardless of treatment costs

  • All stages of cancer, as well as cancer of varying severity, are covered.

 

 

 

 

98.61%

 

 

 

 

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 steps involved in registering a claim 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

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FAQs

  • ✔️How much time do Insurance companies take to settle claims?

    According to the IRDAI, insurance companies in India can take a total of 30 days at maximum to resolve a claim.

  • ✔️What are the differences between the claim settlement ratio & Incurred claim ratio?

    Claim Settlement Ratio

    Incurred Claim Ratio

    Provides information on the number of claims that have been settled

    Provides information on the amount spent on claims

    A higher ratio suggests good claim settlement ability

    Higher ratio may or may not be a performance indicator

  • ✔️How is the claim ratio of health insurance calculated?

    The formula of calculating CSR is as follows-

    CSR=( Total number of claims settled/ total number of claims filed)* 100

  • ✔️How can I find information on the CSR of insurance companies?

    The Claim Settlement Ratio of each insurance company doing business in India is outlined in detail in the IRDAI's Annual Reports, which are published every year. You can find all the information there.

  • ✔️Why do providers reject your insurance claim?

    Insurance companies can only deny claims if there is strong proof that important information was hidden from them. A comprehensive investigation is likely to be conducted by the insurance after a claim is filed, and if all the necessary documents are there, they will likely approve it.

  • ✔️Do I need to select a company with a high claim settlement ratio?

    It is not necessary to always choose a company with a higher claim settlement ratio. However, choosing a company with high CSR can assure you a higher chance of your claim being settled in case you file one.

  • ✔️How many times can I claim health insurance in a year?

    Policyholders can make as many claims as they choose in a given year. However, the total claim amount for all approved requests cannot exceed the policy's sum insured. 

  • ✔️What are the advantages of the claim settlement ratio?

    Knowing an insurance company's claim settlement ratio enables you to assess its dependability. To determine if an insurance company processes a claim well or not, it is important to understand its claim settlement ratio. Selecting an insurance company with a high claim settlement ratio ensures higher reliability.

  • ✔️What is the time limit for the submission of a health insurance claim?

    A health insurance policy allows you to make a claim in two ways: a cashless claim and a reimbursement claim. In the event of a cashless claim, you must notify the insurance provider within 48 or 72 hours of any planned hospitalisation. While in the event of emergency hospitalisation, you must contact the insurance provider within 24 hours of the hospitalisation. In the case of a reimbursement claim, you must notify the insurance provider within 15 days following discharge from the hospital.

  • ✔️How can policyholders notify the insurance company about hospitalisation?

    Policyholders can contact the insurance provider via e-mail or call. They can also reach out to customer care for help.