You may have encountered the abbreviation “ICR” while browsing the websites of various health insurance companies. Do you know what this stands for? Let us decode the meaning of Incurred Claim Ratio or ICR in health insurance.
Incurred Claim Ratio in Health Insurance
Here we detail the incurred claim ratio meaning:
- The Definition: Incurred Claim Ratio or ICR in health insurance refers to the ratio of the total claim amount paid by the insurance company to the total premium amount collected in a financial year. It is a means by which insurers can quantify the extent of their financial involvement through the monthly premium you pay to keep your policy active. It essentially tells you what part of the premium is reverted to you and how much of it is part of the company’s operating cost. This equates to the fact that the money you receive through claims is completely relative to the amount you deposit as a premium.
- The Ideal Range: If the ICR of an insurance company is between 70 to 100 clearings, it is generally regarded as very good. This indicates that the institution is financially sound and capable of settling the claims at the moment when they are promptly needed. An ICR that is below 70% might indicate that the company is levying lower premiums than it should, bringing into question its long-term sustainability. This projects a heavy concern regarding the way claims are handled by that insurer and foreshadows a dim future for the company.
- Looking Beyond the Ratio: Even though ICR is a helpful tool for finding the best health insurance, it provides only limited guidance. There are other important factors to know such as the full details of the insurance, which treatments and facilities are covered and which ones are not, the facilities that are available under the insurer’s network, and lastly, the reputation of the company when it comes to handling claims.
Conclusion
Remember, a good incurred claim ratio in health insurance means better and more trusted returns, along with being a clear sign of a company’s great financial status. Knowing more about it can help you make well-informed decisions and build trust with your insurance company.
Disclaimer: The information provided in this blog is for educational and informational purposes only. It may contain outdated data and information regarding the Insurance industry and products. 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.