Claim settlement ratio (CSR) is one of the most important factors that you should consider when buying an insurance policy. It is one of the best parameters to check the credibility and integrity of the insurance company that you are planning to buy your insurance from.
What is a claim settlement ratio?
The claim settlement ratio is a percentage figure that shows how many claims have been settled by the insurance company in a financial year against the total number of claims received in that financial year. Every year, the Insurance Regulatory and Development Authority of India (IRDAI) publishes the claim settlement ratio of all the registered insurance companies.
You can easily check an insurance company’s credibility by checking its claim settlement ratio using the IRDA Claim Settlement Ratio 2022 annual report.
Importance of the claim settlement ratio
Your insurance company’s claim settlement ratio is important for two reasons:
• Insurer’s credibility:
A higher claim settlement ratio implies that the insurance company has honored a higher number of claims. This is an indicator that the company is committed to settling the claims raised by its policyholders. This shows their credibility.
• Security for you:
The purpose of buying health insurance is to be financially protected in times of crisis. If you cannot get the required financial cushion when you need it the most, the whole purpose of investing in an insurance plan gets defeated. A good and healthy credit settlement ratio ensures financial security for you and your family.
Things to keep in mind when checking CSR
Now that you understand the significance of the claim settlement ratio, here are some things you must keep in mind when checking the CSR of your preferred insurer:
• Higher claim settlement ratio:
The higher the claim settlement ratio, the better. This is because a high claim settlement ratio shows that you have a higher chance of getting your claims settled.
• Stable claim settlement ratio:
Furthermore, check the claim settlement ratio for the last three to four years. A one-time good performance does not ensure consistency on the part of the insurance provider. Choose an insurer such as ICICI Lombard that has a good market reputation and track record. You can check the ICICI Lombard Claim Settlement Ratio from the IRDA’s annual report.
• Authentic source:
Make sure that you check the claim settlement ratio from authentic sources. The best source to check a company’s claim settlement ratio is the IRDA Claim Settlement Ratio 2022 report.
• Amount of claim settled:
Besides the ratio, see the total claim amount that has been settled by the insurance company. A high claim settlement ratio does not reflect the size of the claims that were settled. It is possible that a company settles a high number of claims but with a low insured amount. To avoid such a trade-off, research the annual total claim settled amount of the company as well.
Disclaimer: The information provided in this blog is for educational and informational purposes only. It may contain outdated data and information regarding the topic featured in the article. It is advised to verify the currency and relevance of the data and information before taking any major steps. ICICI Lombard is not liable for any inaccuracies or consequences resulting from the use of this outdated information.
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