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Health Insurance Claim Settlement Ratio

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    What is the Claim Settlement Ratio in Health Insurance?

    The health insurance claim settlement ratio (CSR) is a metric used to rate health insurance companies. It is ascertained in the form of a percentage and represents the number of claims settled by a health insurance company against the total number of claims filed in a year. It helps buyers to compare health insurance companies on the basis of the Health Insurance Claim Settlement Ratio and select what is best according to them. In addition, the higher claim settlement ratio for health insurance guarantees higher chances of getting an easy settlement on your claims. Thus, it is advisable to ensure that your insurer has a good claim settlement ratio of health insurance before opting for a health insurance policy.

    The standardization of health insurance claim settlement was done by IRDAI (Insurance Regulatory and Development Authority of India). It publishes the claims settlement ratio annually in the first month of every year. Ensuring that you choose to evaluate the claim settlement ratio of health insurance companies beforehand will save you from unnecessary trouble later when a claim has to be filed.

    Hence, you have to make sure of the performance of your desired Insurance Company in both the IRDA Claim Settlement Ratio and the amount paid for the claim.

    How is the Claim Settlement Ratio of Health Insurance Companies Calculated?

    As we all know, the claim settlement ratio of health insurance companies refers to the percentage of claims settled by the health insurance company against the total claims received in a year. So, for instance, if an insurer has an 80% health insurance claim settlement ratio, it has settled 80 out of 100 claims.

    The formula used to calculate the CSR rate of an insurance provider is as mentioned below:

    Claim Settlement Ratio = (Total Claims Settled)/(Total Reported Claims + Outstanding Claims at the beginning of Year - Outstanding Claims at the End of Year)

    Consider an example where a health insurance company receives 1000 claims. Out of these, it has paid 973 claims. Of the remaining 27, it has rejected 16 and is yet to decide on 11 claims. The claim settlement ratio, in this case, would be 973/1000 = 97.3%.

    The health insurance claim settlement ratio is always calculated as a percentage.

     

    Years March31, 2020 March 31, 2019 March31, 2018 September 30, 2016
    Claim Settlement Ratio (%) 95.2% 92.58% 89.59% 85.15%

     

    We’re happy to share that Care Health Insurance is one of the health insurance providers with the best claim settlement ratio in health insurance.

    Key Benefits of Comparing Claim Settlement Ratio of Health Insurance Companies

     

    key benefits of claim settlement ratio key benefits of claim settlement ratio

    However, the health insurance claim settlement ratio is not a perfect indicator of how good an insurance company is. Consistency of the claim settlement ratio of health insurance companies over the years must also be taken into consideration. A consistent health insurance claim settlement ratio indicates the company’s reliability, which is often the most vital factor while choosing a health insurance company.

     

    Health Insurance Claim Settlement Process

    Cashless Claim Settlement Process Reimbursement Claim Process
    Step 1: Go to a listed in-network hospital. Step 1: Submit your claim form along with other required documents.
    Step 2: Fill out the proper forms at the insurance desk. Step 2: You'll get an approval letter when your claim is verified.
    Step 3: Send the completed form to our claim management team. Step 3: Respond to queries raised by the claim management team.
    Step 4: You'll get an approval letter when your claim is verified. Step 4: Get approval from the claim management team.
    Step 5: Respond to queries from the claim management team. Step 5: You will be contacted by our claims team if there are specific reasons for rejecting your claim.
    Step 6: You will receive communication about whether your cashless claim is approved or rejected within the standard TAT.  

     

    Why is Claim Settlement Ratio Important while Buying Health Insurance?

    When you are investing in a health insurance policy, that means you are looking for protection and financial security against future medical emergencies. That is why it's advisable to understand the claim settlement ratio and opt for the policy from the company with a higher claim settlement ratio. Read below why it is so important.

    Assures Great Value Products

    The ideal health insurance claim settlement ratio lies between 80-90 %. Companies with a claim settlement ratio between 80 and 90% have great value for healthcare products and are good to go for investment. Therefore, it's advisable to opt for the companies with a higher claim settlement ratio to benefit from a health insurance claim.

    Reflects Efficiency

    You should also check the average claim settlement time by the health insurance companies. It should be a period between 20-30 days. This time frame reflects that the health insurance company is good at settling the claim efficiently. Therefore, opt for the company that offers you the claim settlement within a short period.

    Show Reliability

    New insurers generally have a lower claim settlement ratio as compared to already existing companies. So, , with the insurance claim settlement ratio, you can cross-check your health insurance provider's creditworthiness.

    To know the current details related to Claim Settlement Ratio by IRDA, visit its website and stay updated about the Health Insurance Claim Settlement Ratio. It also publishes the incurred claim ratio of health insurance companies.

    Why does Good Claim Settlement Ratio Mean?

    It is always necessary to understand the importance of a good claims settlement ratio to be safe and secure in the future. A good claim settlement ratio report shows that the health insurance company has sound financial health, and profits, offers qualitative health insurance services , and meets customers' expectations. It is trustworthy to invest your hard-earned money and protect your future. The company ensures their services whenever in time of dire need and provides us with the best possible help.

    Policyholders should be aware of the CSR ratio their health insurance company provides in case of any contingency. It is highly recommended to refer to the 5 years claim settlement ratio history of a particular insurance provider before landing on a decision.If there happens to be inconsistency in the CSR, you better give it another thought.

    The Health Insurance company with the highest claim settlement ratio happens to be the most reliable in the industry. Care health insurance has 95.2% of CSR for the year 2019-20.

    FAQs about Claim Settlement Ratio

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    Q. Where can I get claim forms and a list of documents required for submission?

    You can get the claim forms and a list of documents for submission by visiting Care Health Insurance’s official website. The forms are available under the Claims section on the website.

    Q. Why is it necessary to submit all the records/documents as required by the company?

    Policyholders must submit relevant documents when claiming as it helps the company assess and process the claims of customers in a quick and hassle-free manner.

    Q. What is the duration within which the claim must be reported to the company?

    In case of emergency hospitalization, the insured person must inform the company within 24 hours of admission. If it is a planned hospitalization, the insured person should notify the insurer 48 hours before the admission.

    Q. How many health insurance policy claims can a policyholder request in a year?

    A policyholder can request an unlimited number of claims depending upon the sum insured coverage and limit.

    Q. How much time does it take to settle the health insurance claim?

    If it is a cashless claim, we settle your bills at the time of discharge from the hospital. If it is reimbursement, you have to submit the required documents within 15 days from the discharge. We will process the claim after approval.

    Q. What are the types of health insurance claim ratio?

    There are two types of health insurance claim ratio. One is the claim settlement ratio and the other is the incurred claims ratio.

    Q. What is the difference between Claim Settlement Ratio and Incurred Ratio?

    Claim settlement ratio informs about the number of claims settled whereas Incurred Claim Ratio informs about the amount spent on claims. A Good Claim settlement Ratio indicates claim settling ability while a higher incurred claim ratio may or may not be an indicator of performance.

    Q. Where can information on the claim settlement ratios of health insurance companies be found?

    The IRDAI publishes updated details about the Claim Settlement Ratio of health insurance companies annually. You can find it easily on its website.

    Q. What does the in-house claim processing department mean?

    The insurance provider sets up a department within their own company to offer claim-related services. Care Health Insurance has an in-house claim processing team that makes the process easier and faster.

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