The right choice of an insurance plan is a carefully thought-out decision that must be handled with the utmost care. Not only does it involve much of your finances but also covers situations and provides benefits that the policyholder would have to suffer otherwise. Therefore, several factors must be considered in order to choose the best health insurance plan.
Among such factors, the claim settlement ratio is one of the most important factors. It is especially relevant for health insurance plans where payouts and cover are needed within a short period of time. Read on to find the best health insurance companies in 2021, based on the claim settlement ratio.
What is the Claim Settlement Ratio?
The claim settlement ratio tells about the number of claims that have been filed against the insurance policy. It indicates the number of claims that have been rejected (or accepted) by the insurance company. The higher the ratio, the more claims have been approved by the insurance company and the better is the plan.
A lower claim settlement ratio indicates that more claims have been rejected by the insurance company than have been accepted. This is of course not an ideal statistic. Therefore, make sure to take a look at the claim settlement ratio before settling on a plan. It is released by the Insurance Regulatory and Development Authority of India (IRDAI).
Best Health Insurance Companies In 2021 Based On Claim Settlement Ratio
To help you with your choice, here is the list of the best health insurance companies and their claim settlement ratios.
Rank
Insurance Company
Health Claim Settlement Ratio FY20
Network Hospitals
1.
IFFCO Tokio General Insurance
96.33%
5,000+
2.
Care Health Insurance
95.47%
7,400+
3.
Magma HDI Health Insurance
95.17%
4,300+
4.
The Oriental Insurance Company
93.96%
4,300+
5.
New India General Insurance
92.68%
1,500+
6.
Bajaj Allianz General Insurance
92.24%
6,500+
7.
Max Bupa Health Insurance
89.46%
4,500+
8.
Navi General Insurance
86.98%
5,100+
9.
HDFC ERGO General Insurance
86.52%
10,000+
10.
Manipal Cigna Health Insurance
85.72%
6,500+
11.
Edelweiss General Insurance
85.57%
2,500+
12.
National Insurance Company
83.78%
6,000+
13.
Future Generali General Insurance
82.96%
5,100+
14.
Royal Sundaram General Insurance
81.50%
5,000+
15.
Liberty General Insurance
81.03%
5,000+
16.
ICICI Lombard General Insurance
78.67%
5,000+
17.
Star Health Insurance
78.62%
9,900+
18.
United India Insurance Company
78.03%
7,000+
19.
Reliance General Insurance
76.43%
7,300+
20.
Tata AIG General Insurance
76.04%
3,000+
21.
Bharti AXA General Insurance
76.01%
4,500+
22.
Kotak Mahindra General Insurance
75.45%
4,000+
23.
Acko General Insurance
74.09%
5,000+
24.
Aditya Birla Health Insurance
70.81%
6,000+
25.
Universal Sompo General Insurance
70.75%
4,000+
26.
SBI General Insurance
66.08%
6,000+
27.
Go Digit General Insurance
63.56%
5,900+
28.
Cholamandalam MS General Insurance
56.25%
8,000+
When Can I Make A Claim?
In the event of the unfortunate demise of the policyholder, before the policy period is over, the nominee can file for claims. There are multiple benefits paid out as a part of this claim, most importantly, the death benefit.
Different companies have different protocols to file for claims. However, generally, you are required to show authentic and verified documents to prove that the policyholder has passed away. Any discrepancies or frauds revealed during this process (including any lie in the initial application), may lead to your claim getting rejected.
Conclusion
It is always important to carefully look into all factors if you want to get the best health insurance policy for yourself. Make sure to browse through various options and look into all factors for every plan, in order to get the right health insurance plan.
Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.
Latest health insurance claim settlement ratio of companies in 2021
One of the most important money lessons that the ongoing pandemic has taught us is the need for having the right type of health insurance policy and having an adequate amount of it. However, just having a health insurance policy will not be good enough if the insurer does not honour your claim during a medical emergency. So, how does one select a dependable health insurance provider?
One ratio that can help you is the claims settlement ratio; this ratio gives you an idea as to how reliable the health insurance company can be in case you need to make a claim. The Insurance Regulatory and Development Authority of India (Irdai) has released the claims settlement details of general and health insurance companies for the financial year 2019-20.
Among the private general insurance companies, HDFC Ergo General Insurance tops the chart with 99.8% claims settled in first 3 months of making the claim. This is closely followed by Edelweiss General and Go Digit with 99.72% and 99.65%, respectively, within the first 3-month period. However, going by the incurred claims ratio, Edelweiss General Insurance, a relatively new company, has topped the chart with 113.05% during the financial year 2019-20. (The incurred claims ratio indicates the percentage amount of premium paid towards claims. Read on to find out why this ratio is important.)
Only six private insurers have an incurred claims ratio between 75% and 90% (an ideal range recommended by experts) for the financial year 2019-20. The lowest ratio of 21.08 was registered by Acko General Insurance. The insurer says that it was because its health insurance segment had only been one month into operation till the cut off date of the IRDA annual report. The other three insurers that have registered ratio below 50% are Navi General Insurance(erstwhile DHFL General Insurance) 34.69%, Cholamandalam MS General Insurance 40.67% and Kotak Mahindra General Insurance 49.22%.
Public sector general insurance companies have much lower claims settlement ratio (within the first three-months) compared to private insurers. Oriental Insurance is at top with 92.71% and New India Insurance with 91.99% claim settlement ratios. However, all public sector insurers have reported incurred claims ratio above 100% for 2019-20, showing their liberal policy towards paying claims.
When it comes to stand alone health insurance companies the competition is really tough as 6 out of 7 companies have claims settlement ratio above 99% during the three-month period. The only outlier is Reliance Health with 97%. However, when it comes to incurred claims ratio only HDFC Ergo (Erstwhile Apollo Munich Health Insurance) has registered a number above 70% with 73.69%.
*Erstwhile DHFL General Insurance Co. Ltd., ** Erstwhile Apollo Munich Health Insurance Ltd., @ Erstwhile CignaTTK Health Insurance Co. Ltd., # With effect from November 15, 2019, the business portfolio of Reliance Health Insurance Ltd. was transferred to Reliance General Insurance Co. Ltd vide IRDAI Order dated November 06, 2019.
^Claim paid data for general insurance companies is for overall claim including health insurance.
Source: IRDA Annual Report 2019-20
So, if you are buying a new policy or porting your existing health insurance policy to a new insurer make sure you check the latest claim settlement ratio of all the insurers before you take a final call.
How claims settlement ratio helps
“It is a term which reveals how much claims have been paid by the insurer in a given year. This ratio is one of the important parameters to look at before buying the policy. With this ratio, policyholders can gauge how much claims are paid by the insurer and how much of it gets rejected,” says Expert
This ratio tells you that out of 100 claims that the insurance company receives how many have been paid by the insurer. If the claims settlement ratio is 90%, it means that insurer made payments against 90 claims out of 100 claims and did not pay for the remaining 10 claims during the specified period.
A good insurance company should not only honour all eligible claims but it should also process these in the swiftest possible manner. So higher the ratio, better it is for the policyholders. For health insurance companies this ratio is published for different period of times such as less than 3 months, 3 months to 6 months etc. However, the most critical data is for the period less than 3 months. So, if company has the highest claim settlement ratio within the first 3-month period, then you know that it honours more claims in the shortest possible time.
Why you must also look at incurred claims ratio
While claims settlement ratio tells you about the number of claims in terms of percentage that the health insurance company settles, it does not throw light on the amount that it has paid as claims. This is where the incurred claims ratio helps – it helps you understand what percentage in monetary terms the insurer is paying towards settling these claims.
Incurred claims ratio is the ratio of net incurred claims to net premium received by the health insurance company during the year.
Against the total claims, which is gross claims, received during the year the insurance company receives some payment from its reinsurer. “The incurred claims ratio indicates insurance companies’ ability to pay claims. Net claims incurred are gross incurred claims less all claims recovered from reinsurers related to those gross incurred claims” says Expert.
What should be the ideal incurred claims ratio?
A lower incurred claim ratio means that the insurers has very strict claim processing or tough underwriting parameters against which a good number of polices are getting rejected. It also shows that it is charging much a higher premium in comparison to the benefit it is providing to its policyholders. So, it is better to avoid a company with a low incurred claim ratio.
Does that mean a high ratio is always good for policyholders? Not necessarily. Here is why.
“An incurred claims ratio of more than 100% is not good for insurance companies as it shows that the insurance company has spent more money on settling claims than it received as insurance premium. Which basically means that insurance is making a loss if the incurred claims ratio is more than 100%,” says Expert.
While going through the incurred claim ratio you need to be mindful of higher ratio by new insurance players. During the initial years an insurance company may not have sold enough policies to receive substantial premium and hence, may have higher ratio often above 100.
So, what should be an ideal range of incurred claim ratio? “The incurred claims ratio of less than 50% is not productive for any policyholder. Ideally incurred claims ratio should be in the range of 75-90%,” suggests Expert.
The right choice of an insurance plan is a carefully thought-out decision that must be handled with the utmost care. Not only does it involve much of your finances but also covers situations and provides benefits that the policyholder would have to suffer otherwise. Therefore, several factors must be considered in order to choose the best health insurance plan.
Among such factors, the claim settlement ratio is one of the most important factors. It is especially relevant for health insurance plans where payouts and cover are needed within a short period of time. Read on to find the best health insurance companies in 2021, based on the claim settlement ratio.
What is the Claim Settlement Ratio?
The claim settlement ratio tells about the number of claims that have been filed against the insurance policy. It indicates the number of claims that have been rejected (or accepted) by the insurance company. The higher the ratio, the more claims have been approved by the insurance company and the better is the plan.
A lower claim settlement ratio indicates that more claims have been rejected by the insurance company than have been accepted. This is of course not an ideal statistic. Therefore, make sure to take a look at the claim settlement ratio before settling on a plan. It is released by the Insurance Regulatory and Development Authority of India (IRDAI).
Best Health Insurance Companies In 2021 Based On Claim Settlement Ratio
To help you with your choice, here is the list of the best health insurance companies and their claim settlement ratios.
Rank
Insurance Company
Health Claim Settlement Ratio FY20
Network Hospitals
1.
IFFCO Tokio General Insurance
96.33%
5,000+
2.
Care Health Insurance
95.47%
7,400+
3.
Magma HDI Health Insurance
95.17%
4,300+
4.
The Oriental Insurance Company
93.96%
4,300+
5.
New India General Insurance
92.68%
1,500+
6.
Bajaj Allianz General Insurance
92.24%
6,500+
7.
Max Bupa Health Insurance
89.46%
4,500+
8.
Navi General Insurance
86.98%
5,100+
9.
HDFC ERGO General Insurance
86.52%
10,000+
10.
Manipal Cigna Health Insurance
85.72%
6,500+
11.
Edelweiss General Insurance
85.57%
2,500+
12.
National Insurance Company
83.78%
6,000+
13.
Future Generali General Insurance
82.96%
5,100+
14.
Royal Sundaram General Insurance
81.50%
5,000+
15.
Liberty General Insurance
81.03%
5,000+
16.
ICICI Lombard General Insurance
78.67%
5,000+
17.
Star Health Insurance
78.62%
9,900+
18.
United India Insurance Company
78.03%
7,000+
19.
Reliance General Insurance
76.43%
7,300+
20.
Tata AIG General Insurance
76.04%
3,000+
21.
Bharti AXA General Insurance
76.01%
4,500+
22.
Kotak Mahindra General Insurance
75.45%
4,000+
23.
Acko General Insurance
74.09%
5,000+
24.
Aditya Birla Health Insurance
70.81%
6,000+
25.
Universal Sompo General Insurance
70.75%
4,000+
26.
SBI General Insurance
66.08%
6,000+
27.
Go Digit General Insurance
63.56%
5,900+
28.
Cholamandalam MS General Insurance
56.25%
8,000+
When Can I Make A Claim?
In the event of the unfortunate demise of the policyholder, before the policy period is over, the nominee can file for claims. There are multiple benefits paid out as a part of this claim, most importantly, the death benefit.
Different companies have different protocols to file for claims. However, generally, you are required to show authentic and verified documents to prove that the policyholder has passed away. Any discrepancies or frauds revealed during this process (including any lie in the initial application), may lead to your claim getting rejected.
Conclusion
It is always important to carefully look into all factors if you want to get the best health insurance policy for yourself. Make sure to browse through various options and look into all factors for every plan, in order to get the right health insurance plan.
Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.
Latest health insurance claim settlement ratio of companies in 2021
One of the most important money lessons that the ongoing pandemic has taught us is the need for having the right type of health insurance policy and having an adequate amount of it. However, just having a health insurance policy will not be good enough if the insurer does not honour your claim during a medical emergency. So, how does one select a dependable health insurance provider?
One ratio that can help you is the claims settlement ratio; this ratio gives you an idea as to how reliable the health insurance company can be in case you need to make a claim. The Insurance Regulatory and Development Authority of India (Irdai) has released the claims settlement details of general and health insurance companies for the financial year 2019-20.
Among the private general insurance companies, HDFC Ergo General Insurance tops the chart with 99.8% claims settled in first 3 months of making the claim. This is closely followed by Edelweiss General and Go Digit with 99.72% and 99.65%, respectively, within the first 3-month period. However, going by the incurred claims ratio, Edelweiss General Insurance, a relatively new company, has topped the chart with 113.05% during the financial year 2019-20. (The incurred claims ratio indicates the percentage amount of premium paid towards claims. Read on to find out why this ratio is important.)
Only six private insurers have an incurred claims ratio between 75% and 90% (an ideal range recommended by experts) for the financial year 2019-20. The lowest ratio of 21.08 was registered by Acko General Insurance. The insurer says that it was because its health insurance segment had only been one month into operation till the cut off date of the IRDA annual report. The other three insurers that have registered ratio below 50% are Navi General Insurance(erstwhile DHFL General Insurance) 34.69%, Cholamandalam MS General Insurance 40.67% and Kotak Mahindra General Insurance 49.22%.
Public sector general insurance companies have much lower claims settlement ratio (within the first three-months) compared to private insurers. Oriental Insurance is at top with 92.71% and New India Insurance with 91.99% claim settlement ratios. However, all public sector insurers have reported incurred claims ratio above 100% for 2019-20, showing their liberal policy towards paying claims.
When it comes to stand alone health insurance companies the competition is really tough as 6 out of 7 companies have claims settlement ratio above 99% during the three-month period. The only outlier is Reliance Health with 97%. However, when it comes to incurred claims ratio only HDFC Ergo (Erstwhile Apollo Munich Health Insurance) has registered a number above 70% with 73.69%.
*Erstwhile DHFL General Insurance Co. Ltd., ** Erstwhile Apollo Munich Health Insurance Ltd., @ Erstwhile CignaTTK Health Insurance Co. Ltd., # With effect from November 15, 2019, the business portfolio of Reliance Health Insurance Ltd. was transferred to Reliance General Insurance Co. Ltd vide IRDAI Order dated November 06, 2019.
^Claim paid data for general insurance companies is for overall claim including health insurance.
Source: IRDA Annual Report 2019-20
So, if you are buying a new policy or porting your existing health insurance policy to a new insurer make sure you check the latest claim settlement ratio of all the insurers before you take a final call.
How claims settlement ratio helps
“It is a term which reveals how much claims have been paid by the insurer in a given year. This ratio is one of the important parameters to look at before buying the policy. With this ratio, policyholders can gauge how much claims are paid by the insurer and how much of it gets rejected,” says Expert
This ratio tells you that out of 100 claims that the insurance company receives how many have been paid by the insurer. If the claims settlement ratio is 90%, it means that insurer made payments against 90 claims out of 100 claims and did not pay for the remaining 10 claims during the specified period.
A good insurance company should not only honour all eligible claims but it should also process these in the swiftest possible manner. So higher the ratio, better it is for the policyholders. For health insurance companies this ratio is published for different period of times such as less than 3 months, 3 months to 6 months etc. However, the most critical data is for the period less than 3 months. So, if company has the highest claim settlement ratio within the first 3-month period, then you know that it honours more claims in the shortest possible time.
Why you must also look at incurred claims ratio
While claims settlement ratio tells you about the number of claims in terms of percentage that the health insurance company settles, it does not throw light on the amount that it has paid as claims. This is where the incurred claims ratio helps – it helps you understand what percentage in monetary terms the insurer is paying towards settling these claims.
Incurred claims ratio is the ratio of net incurred claims to net premium received by the health insurance company during the year.
Against the total claims, which is gross claims, received during the year the insurance company receives some payment from its reinsurer. “The incurred claims ratio indicates insurance companies’ ability to pay claims. Net claims incurred are gross incurred claims less all claims recovered from reinsurers related to those gross incurred claims” says Expert.
What should be the ideal incurred claims ratio?
A lower incurred claim ratio means that the insurers has very strict claim processing or tough underwriting parameters against which a good number of polices are getting rejected. It also shows that it is charging much a higher premium in comparison to the benefit it is providing to its policyholders. So, it is better to avoid a company with a low incurred claim ratio.
Does that mean a high ratio is always good for policyholders? Not necessarily. Here is why.
“An incurred claims ratio of more than 100% is not good for insurance companies as it shows that the insurance company has spent more money on settling claims than it received as insurance premium. Which basically means that insurance is making a loss if the incurred claims ratio is more than 100%,” says Expert.
While going through the incurred claim ratio you need to be mindful of higher ratio by new insurance players. During the initial years an insurance company may not have sold enough policies to receive substantial premium and hence, may have higher ratio often above 100.
So, what should be an ideal range of incurred claim ratio? “The incurred claims ratio of less than 50% is not productive for any policyholder. Ideally incurred claims ratio should be in the range of 75-90%,” suggests Expert.
Choosing the Right Health Insurer!
The right choice of an insurance plan is a carefully thought-out decision that must be handled with the utmost care. Not only does it involve much of your finances but also covers situations and provides benefits that the policyholder would have to suffer otherwise. Therefore, several factors must be considered in order to choose the best health insurance plan.
Among such factors, the claim settlement ratio is one of the most important factors. It is especially relevant for health insurance plans where payouts and cover are needed within a short period of time. Read on to find the best health insurance companies in 2021, based on the claim settlement ratio.
What is the Claim Settlement Ratio?
The claim settlement ratio tells about the number of claims that have been filed against the insurance policy. It indicates the number of claims that have been rejected (or accepted) by the insurance company. The higher the ratio, the more claims have been approved by the insurance company and the better is the plan.
A lower claim settlement ratio indicates that more claims have been rejected by the insurance company than have been accepted. This is of course not an ideal statistic. Therefore, make sure to take a look at the claim settlement ratio before settling on a plan. It is released by the Insurance Regulatory and Development Authority of India (IRDAI).
Best Health Insurance Companies In 2021 Based On Claim Settlement Ratio
To help you with your choice, here is the list of the best health insurance companies and their claim settlement ratios.
When Can I Make A Claim?
In the event of the unfortunate demise of the policyholder, before the policy period is over, the nominee can file for claims. There are multiple benefits paid out as a part of this claim, most importantly, the death benefit.
Different companies have different protocols to file for claims. However, generally, you are required to show authentic and verified documents to prove that the policyholder has passed away. Any discrepancies or frauds revealed during this process (including any lie in the initial application), may lead to your claim getting rejected.
Conclusion
It is always important to carefully look into all factors if you want to get the best health insurance policy for yourself. Make sure to browse through various options and look into all factors for every plan, in order to get the right health insurance plan.
Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.
Latest health insurance claim settlement ratio of companies in 2021
One of the most important money lessons that the ongoing pandemic has taught us is the need for having the right type of health insurance policy and having an adequate amount of it. However, just having a health insurance policy will not be good enough if the insurer does not honour your claim during a medical emergency. So, how does one select a dependable health insurance provider?
One ratio that can help you is the claims settlement ratio; this ratio gives you an idea as to how reliable the health insurance company can be in case you need to make a claim. The Insurance Regulatory and Development Authority of India (Irdai) has released the claims settlement details of general and health insurance companies for the financial year 2019-20.
Among the private general insurance companies, HDFC Ergo General Insurance tops the chart with 99.8% claims settled in first 3 months of making the claim. This is closely followed by Edelweiss General and Go Digit with 99.72% and 99.65%, respectively, within the first 3-month period. However, going by the incurred claims ratio, Edelweiss General Insurance, a relatively new company, has topped the chart with 113.05% during the financial year 2019-20. (The incurred claims ratio indicates the percentage amount of premium paid towards claims. Read on to find out why this ratio is important.)
Only six private insurers have an incurred claims ratio between 75% and 90% (an ideal range recommended by experts) for the financial year 2019-20. The lowest ratio of 21.08 was registered by Acko General Insurance. The insurer says that it was because its health insurance segment had only been one month into operation till the cut off date of the IRDA annual report. The other three insurers that have registered ratio below 50% are Navi General Insurance(erstwhile DHFL General Insurance) 34.69%, Cholamandalam MS General Insurance 40.67% and Kotak Mahindra General Insurance 49.22%.
Public sector general insurance companies have much lower claims settlement ratio (within the first three-months) compared to private insurers. Oriental Insurance is at top with 92.71% and New India Insurance with 91.99% claim settlement ratios. However, all public sector insurers have reported incurred claims ratio above 100% for 2019-20, showing their liberal policy towards paying claims.
When it comes to stand alone health insurance companies the competition is really tough as 6 out of 7 companies have claims settlement ratio above 99% during the three-month period. The only outlier is Reliance Health with 97%. However, when it comes to incurred claims ratio only HDFC Ergo (Erstwhile Apollo Munich Health Insurance) has registered a number above 70% with 73.69%.
*Erstwhile DHFL General Insurance Co. Ltd., ** Erstwhile Apollo Munich Health Insurance Ltd., @ Erstwhile CignaTTK Health Insurance Co. Ltd., # With effect from November 15, 2019, the business portfolio of Reliance Health Insurance Ltd. was transferred to Reliance General Insurance Co. Ltd vide IRDAI Order dated November 06, 2019.
^Claim paid data for general insurance companies is for overall claim including health insurance.
Source: IRDA Annual Report 2019-20
So, if you are buying a new policy or porting your existing health insurance policy to a new insurer make sure you check the latest claim settlement ratio of all the insurers before you take a final call.
How claims settlement ratio helps
“It is a term which reveals how much claims have been paid by the insurer in a given year. This ratio is one of the important parameters to look at before buying the policy. With this ratio, policyholders can gauge how much claims are paid by the insurer and how much of it gets rejected,” says Expert
This ratio tells you that out of 100 claims that the insurance company receives how many have been paid by the insurer. If the claims settlement ratio is 90%, it means that insurer made payments against 90 claims out of 100 claims and did not pay for the remaining 10 claims during the specified period.
A good insurance company should not only honour all eligible claims but it should also process these in the swiftest possible manner. So higher the ratio, better it is for the policyholders. For health insurance companies this ratio is published for different period of times such as less than 3 months, 3 months to 6 months etc. However, the most critical data is for the period less than 3 months. So, if company has the highest claim settlement ratio within the first 3-month period, then you know that it honours more claims in the shortest possible time.
Why you must also look at incurred claims ratio
While claims settlement ratio tells you about the number of claims in terms of percentage that the health insurance company settles, it does not throw light on the amount that it has paid as claims. This is where the incurred claims ratio helps – it helps you understand what percentage in monetary terms the insurer is paying towards settling these claims.
Incurred claims ratio is the ratio of net incurred claims to net premium received by the health insurance company during the year.
Against the total claims, which is gross claims, received during the year the insurance company receives some payment from its reinsurer. “The incurred claims ratio indicates insurance companies’ ability to pay claims. Net claims incurred are gross incurred claims less all claims recovered from reinsurers related to those gross incurred claims” says Expert.
What should be the ideal incurred claims ratio?
A lower incurred claim ratio means that the insurers has very strict claim processing or tough underwriting parameters against which a good number of polices are getting rejected. It also shows that it is charging much a higher premium in comparison to the benefit it is providing to its policyholders. So, it is better to avoid a company with a low incurred claim ratio.
Does that mean a high ratio is always good for policyholders? Not necessarily. Here is why.
“An incurred claims ratio of more than 100% is not good for insurance companies as it shows that the insurance company has spent more money on settling claims than it received as insurance premium. Which basically means that insurance is making a loss if the incurred claims ratio is more than 100%,” says Expert.
While going through the incurred claim ratio you need to be mindful of higher ratio by new insurance players. During the initial years an insurance company may not have sold enough policies to receive substantial premium and hence, may have higher ratio often above 100.
So, what should be an ideal range of incurred claim ratio? “The incurred claims ratio of less than 50% is not productive for any policyholder. Ideally incurred claims ratio should be in the range of 75-90%,” suggests Expert.
Choosing the Right Health Insurer!
The right choice of an insurance plan is a carefully thought-out decision that must be handled with the utmost care. Not only does it involve much of your finances but also covers situations and provides benefits that the policyholder would have to suffer otherwise. Therefore, several factors must be considered in order to choose the best health insurance plan.
Among such factors, the claim settlement ratio is one of the most important factors. It is especially relevant for health insurance plans where payouts and cover are needed within a short period of time. Read on to find the best health insurance companies in 2021, based on the claim settlement ratio.
What is the Claim Settlement Ratio?
The claim settlement ratio tells about the number of claims that have been filed against the insurance policy. It indicates the number of claims that have been rejected (or accepted) by the insurance company. The higher the ratio, the more claims have been approved by the insurance company and the better is the plan.
A lower claim settlement ratio indicates that more claims have been rejected by the insurance company than have been accepted. This is of course not an ideal statistic. Therefore, make sure to take a look at the claim settlement ratio before settling on a plan. It is released by the Insurance Regulatory and Development Authority of India (IRDAI).
Best Health Insurance Companies In 2021 Based On Claim Settlement Ratio
To help you with your choice, here is the list of the best health insurance companies and their claim settlement ratios.
When Can I Make A Claim?
In the event of the unfortunate demise of the policyholder, before the policy period is over, the nominee can file for claims. There are multiple benefits paid out as a part of this claim, most importantly, the death benefit.
Different companies have different protocols to file for claims. However, generally, you are required to show authentic and verified documents to prove that the policyholder has passed away. Any discrepancies or frauds revealed during this process (including any lie in the initial application), may lead to your claim getting rejected.
Conclusion
It is always important to carefully look into all factors if you want to get the best health insurance policy for yourself. Make sure to browse through various options and look into all factors for every plan, in order to get the right health insurance plan.
Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.
Latest health insurance claim settlement ratio of companies in 2021
One of the most important money lessons that the ongoing pandemic has taught us is the need for having the right type of health insurance policy and having an adequate amount of it. However, just having a health insurance policy will not be good enough if the insurer does not honour your claim during a medical emergency. So, how does one select a dependable health insurance provider?
One ratio that can help you is the claims settlement ratio; this ratio gives you an idea as to how reliable the health insurance company can be in case you need to make a claim. The Insurance Regulatory and Development Authority of India (Irdai) has released the claims settlement details of general and health insurance companies for the financial year 2019-20.
Among the private general insurance companies, HDFC Ergo General Insurance tops the chart with 99.8% claims settled in first 3 months of making the claim. This is closely followed by Edelweiss General and Go Digit with 99.72% and 99.65%, respectively, within the first 3-month period. However, going by the incurred claims ratio, Edelweiss General Insurance, a relatively new company, has topped the chart with 113.05% during the financial year 2019-20. (The incurred claims ratio indicates the percentage amount of premium paid towards claims. Read on to find out why this ratio is important.)
Only six private insurers have an incurred claims ratio between 75% and 90% (an ideal range recommended by experts) for the financial year 2019-20. The lowest ratio of 21.08 was registered by Acko General Insurance. The insurer says that it was because its health insurance segment had only been one month into operation till the cut off date of the IRDA annual report. The other three insurers that have registered ratio below 50% are Navi General Insurance(erstwhile DHFL General Insurance) 34.69%, Cholamandalam MS General Insurance 40.67% and Kotak Mahindra General Insurance 49.22%.
Public sector general insurance companies have much lower claims settlement ratio (within the first three-months) compared to private insurers. Oriental Insurance is at top with 92.71% and New India Insurance with 91.99% claim settlement ratios. However, all public sector insurers have reported incurred claims ratio above 100% for 2019-20, showing their liberal policy towards paying claims.
When it comes to stand alone health insurance companies the competition is really tough as 6 out of 7 companies have claims settlement ratio above 99% during the three-month period. The only outlier is Reliance Health with 97%. However, when it comes to incurred claims ratio only HDFC Ergo (Erstwhile Apollo Munich Health Insurance) has registered a number above 70% with 73.69%.
*Erstwhile DHFL General Insurance Co. Ltd., ** Erstwhile Apollo Munich Health Insurance Ltd., @ Erstwhile CignaTTK Health Insurance Co. Ltd., # With effect from November 15, 2019, the business portfolio of Reliance Health Insurance Ltd. was transferred to Reliance General Insurance Co. Ltd vide IRDAI Order dated November 06, 2019.
^Claim paid data for general insurance companies is for overall claim including health insurance.
Source: IRDA Annual Report 2019-20
So, if you are buying a new policy or porting your existing health insurance policy to a new insurer make sure you check the latest claim settlement ratio of all the insurers before you take a final call.
How claims settlement ratio helps
“It is a term which reveals how much claims have been paid by the insurer in a given year. This ratio is one of the important parameters to look at before buying the policy. With this ratio, policyholders can gauge how much claims are paid by the insurer and how much of it gets rejected,” says Expert
This ratio tells you that out of 100 claims that the insurance company receives how many have been paid by the insurer. If the claims settlement ratio is 90%, it means that insurer made payments against 90 claims out of 100 claims and did not pay for the remaining 10 claims during the specified period.
A good insurance company should not only honour all eligible claims but it should also process these in the swiftest possible manner. So higher the ratio, better it is for the policyholders. For health insurance companies this ratio is published for different period of times such as less than 3 months, 3 months to 6 months etc. However, the most critical data is for the period less than 3 months. So, if company has the highest claim settlement ratio within the first 3-month period, then you know that it honours more claims in the shortest possible time.
Why you must also look at incurred claims ratio
While claims settlement ratio tells you about the number of claims in terms of percentage that the health insurance company settles, it does not throw light on the amount that it has paid as claims. This is where the incurred claims ratio helps – it helps you understand what percentage in monetary terms the insurer is paying towards settling these claims.
Incurred claims ratio is the ratio of net incurred claims to net premium received by the health insurance company during the year.
Against the total claims, which is gross claims, received during the year the insurance company receives some payment from its reinsurer. “The incurred claims ratio indicates insurance companies’ ability to pay claims. Net claims incurred are gross incurred claims less all claims recovered from reinsurers related to those gross incurred claims” says Expert.
What should be the ideal incurred claims ratio?
A lower incurred claim ratio means that the insurers has very strict claim processing or tough underwriting parameters against which a good number of polices are getting rejected. It also shows that it is charging much a higher premium in comparison to the benefit it is providing to its policyholders. So, it is better to avoid a company with a low incurred claim ratio.
Does that mean a high ratio is always good for policyholders? Not necessarily. Here is why.
“An incurred claims ratio of more than 100% is not good for insurance companies as it shows that the insurance company has spent more money on settling claims than it received as insurance premium. Which basically means that insurance is making a loss if the incurred claims ratio is more than 100%,” says Expert.
While going through the incurred claim ratio you need to be mindful of higher ratio by new insurance players. During the initial years an insurance company may not have sold enough policies to receive substantial premium and hence, may have higher ratio often above 100.
So, what should be an ideal range of incurred claim ratio? “The incurred claims ratio of less than 50% is not productive for any policyholder. Ideally incurred claims ratio should be in the range of 75-90%,” suggests Expert.
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