The health claim settlement ratio represents the percentage of claims an insurance company settles within a specific period. The higher the claim settlement ratio, the more reliable an insurer is for buying health insurance. Key factor to keep in mind when selecting a health insurance policy for yourself and your loved ones.

Importance of Claim Settlement Ratio (CSR) in choosing the right health insurance plan

  • To understand the company’s ability to pay claims.
  • An ideal metric for comparing health insurers.
  • Measuring the constancy of insurers in settling claims.
  • Best way to measure a company's reliability.

How to Check the Health Insurance Claim Settlement Ratio?

The Insurance Regulatory Development Authority of India releases its annual report each year, visible on its official website. View the IRDA Annual Report and save the PDF for the most recent financial year. The higher the claim settlement ratio, the better the chances of getting the claim amount in case of a medical emergency.

How to calculate the Health Insurance Claim Settlement Ratio?

Claim Settlement Ratio

Total Number of Claims Settled / Total Number of Claims Received) x 100

Example:

If the Health Insurer is receiving 2 Lakh claims in a policy year.

Settle approximately  198,000

The insurer’s claims settlement ratio = (1,96,500/2,00,000) X 100 = 98.25%.

Difference Between Incurred Claim Ratio & Claim Settlement Ratio

Incurred Claim Ratio

Claim Settlement Ratio

It tells us about the amount spent on claims

It reflects the number of claims settled by a health insurance company.

A higher percentage may not be an indicator of performance.

A high percentage indicates a good claim-settling ability.

How to use  Health Insurance Claim Settlement Ratio as an advantage?

Always choose an insurer offering High CSR.

Ideally, look for a health insurance provider offering a CSR of 90% or higher. It shows a strong track record of settling claims.

Other factors to consider

Other factors to evaluate to benefit from CSR are coverage options, network hospitals, exclusions, premiums, and any add-ons or riders the insurer offers. A comprehensive analysis of all these factors will ensure that you get the best value for your money and comprehensive coverage.

Check for Claim Settlement Process Transparency

It's important to choose an insurer who is always transparent in its claims process. Make sure the insurance provider provides clear details on how to file a claim, the necessary documents, the timeline for settlement, and any potential roadblocks.

There are two types of Health Insurance Claim Settlement Process:

Cashless Claim Process

This cashless claim is filed in cases when the health insured is getting treatment at the network hospital of a health insurance company.

  • Claim Intimation
  • Documents Verification
  • Documents Approval
  • Claim Settlement

Reimbursement Claim Process

When a policyholder is getting medical treatment at a hospital that is not a part of the insurance company’s network hospitals. In that case, the policyholder can file a reimbursement claim. Initially, in such a case, the policyholder has to pay the cost out of his pocket and then has to file a reimbursement claim.

  • Intimate the claim to the health insurance company
  • Document Submission
  • Document Approval
  • Claim Reimbursement
  • Required Documents For Claim Settlement

Documents required to file a health insurance claim

  • Duly-filled claim form
  • ID proof of the claimant
  • Medical certificate issued by the doctor
  • FIR (In case of an accident)
  • Prescription and cash invoice from pharmacy/hospital

Also Read: How to File a Reimbursement Claim Under Health Insurance?

Bottom Line

While CSR is important, it shouldn’t be the only thing you consider. Take time to compare different insurance plans, check what they cover, and think about how easy it is to file a claim. Choosing a policy that’s easy to claim will give you peace of mind, especially in case of a health emergency.

A health insurance plan can be offered at an affordable premium amount with comprehensive coverage and many additional benefits. However, if that health insurance company has a poor claim settlement ratio, you may find it difficult to settle claims when you need it the most. The whole point of buying health insurance would be to fail.

FAQs on Claim Settlement Ratio

What is the best claim settlement ratio in health insurance?

Generally, a claim settlement ratio of above 80% is considered a good claim settlement ratio in health insurance.

How long does it take to settle health insurance claims?

As per IRDAI instructions, health insurance companies need to settle claims within 30 days.

Can two companies have the same CSR but different performance?

Yes, two insurers may have similar CSR and may differ in other areas, such as claim processing time, network hospitals, or customer service. It’s important to evaluate these aspects as well.

Does CSR impact premium rates?

No, CSR does not directly impact premium rates. Premiums are calculated based on factors like coverage, age, medical history, and the insurer’s underwriting guidelines.