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
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.
