The claim settlement ratio (CSR) of the insurance company is one of the most important factors to be considered when investing in an insurance product. A good CSR is an assurance of your claim being honoured in the time of your need.

What is a claim settlement ratio in health insurance?

Simply put, the claim settlement ratio is the percentage of claims that an insurance company settles against the number of claims it has received. Every year, insurance companies declare their claim settlement ratio. This ratio is calculated annually based on the number of claims received and settled during a particular fiscal year. This is inclusive of life insurance claims as well as other insurance products such as the claim settlement ratio of travel insurance and health insurance claim settlement ratio.

You can find the CSR of all the registered insured companies on the official website of the Insurance Regulatory and Development Authority of India (IRDAI).

Importance of a claim settlement ratio in health insurance

The claim settlement ratio shows the credibility of the insurance company. The higher the CSR, the higher the credibility of the insurance company. It means a higher chance of your claim being settled without any hassles. There is no point in investing in an insurance product if you cannot trust your insurer to support you when you need to utilise your policy. A trustworthy insurer honours your claim if you have done everything on your part honestly. You must choose an insurer with a credible track record of settling the claims of its policyholders.

Health insurance claim settlement process

Understanding the claim settlement process can help policyholders navigate their claims more effectively:

1. Claim intimation: Notify the insurer about the hospitalisation or medical treatment promptly.
2. Documentation: Submit all necessary documents, including claim forms, medical reports, and bills.
3. Claim processing: The insurer reviews the submitted documents to verify the claim's validity.
4. Approval and settlement: Upon approval, the insurer disburses the claim amount as per the policy terms.

Submission of documents timely can expedite the settlement process, ensuring swift financial support during medical emergencies.

How to check health insurance claim settlement ratio?

Suppose you are about to buy a health insurance policy and you are checking the health insurance claim settlement ratio of your preferred insurer. Here are the things that you must assess before buying the insurance product:

• High CSR:
• Make sure that the company you are planning to buy insurance from has a high claim settlement ratio. A high CSR implies a higher chance of your claim being settled.
• Claim settlement process should be easy:
• Check the claim settlement process of the insurance provider. Go to their website or talk to their representative to know the details of the process. In the hour of need, you do not want to be engrossed in a tedious long claim settlement process.
• Claim settlement process should be quick:
• Check the average time taken by the insurance company to settle the claim. If it is a long time-consuming process, chances are high that it may cause you financial and mental stress when you least want it.
• CSR of the last five years:
• Look beyond the immediately preceding financial year and check the CSR of the last five years. This will tell if your preferred insurer has been settling claims consistently.
• Financial statements of the insurance company:
• Sometimes, knowing the CSR history of the insurance provider is not enough. It can be so that they have managed to maintain a high CSR until now. So, go for a financially-healthy insurance company. For example, ICICI Lombard’s claim settlement ratio is not only good, but its financial statements are also positive, making it a trustworthy and credible insurance company.

Conclusion

When picking a health insurance plan, especially a critical illness insurance, the claim settlement ratio (CSR) is important to check. It shows how well an insurer handles claims and pays policyholders on time. A higher CSR means you have a better chance of getting financial help when you need it most. It is also smart to look at factors like how many claims get rejected or are still pending. Checking these components can help you choose a health insurance policy that gives you proper coverage, peace of mind, and quick support during medical emergencies.

Disclaimer: The information provided in this blog is for educational and informational purposes only. It is not intended as a substitute for professional advice, diagnosis, or treatment. Please consult your general physician or another certified medical professional for any questions regarding a medical condition. Relying on any information provided in this blog is solely at your own risk, and ICICI Lombard is not responsible for any effects or consequences resulting from the use of the information shared.

Like any other market, the insurance market also runs on the dynamics of demand and supply. People need insurance companies to offer them insurance products that protect them from various financial losses. At the same time, the insurance providers are also required to meet the expectations of their customers—the policyholders. The most crucial expectation that people have from these insurance providers is that their claim will be settled easily, that is, they would be reimbursed with the insured sum as and when needed.

Principles of claim settlement

In their pursuit to meet the insurance market demands, the suppliers or the insurance providers must adhere to a certain set of principles surrounding claim settlement. There are primarily three major pillars of claim settlement:

Verification of the loss

It is the responsibility of the insurance provider to verify the claim. They must ensure that the authentic claims do not get rejected or delayed, and the inauthentic ones do not make it to the final claim disbursal. This involves estimating correctly the instance of loss and corroborating the same with the policy coverage.

Prompt payment

The second principle for settling a claim is to clear the claim amount at the earliest—that is as soon as the information collection and verification are completed. Once the claim is found to be valid, the payment of the insured sum should not be delayed by any means.

Assistance to the insured

The insurance company must provide systematic and consistent assistance to the policyholder during claim settlement. While the need for insurance is widely understood, its processing is still a long shot for many policyholders. It is the responsibility of the insurance provider to ensure that their customer has access to correct information about the claim settlement process.

Some key points for policyholders

While insurance providers are expected to stick to the principles mentioned above, insurance buyers are suggested to take note of certain factors surrounding claim settlement. These are:

• Before buying an insurance policy, you should research well to ensure that the company you opt for is credible. Always check the claim settlement ratio of your preferred company. The higher the claim settlement ratio, the better the chances of your claim being settled without any hassles.
• You can find the claim settlement ratio of all the IRDA-registered companies on the IRDA Claim Settlement Ratio 2022
• Say, you zero in on an insurance provider with a high claim settlement ratio. But, that is not enough. You should also check the overall financial health of the company.