Have you wondered how prompt and efficient your insurer is when it comes to settling policyholder claims? The claim settlement ratio of insurance companies helps us understand this aspect. This year, Indian insurance watchdog IRDAI (Insurance Regulatory and Development Authority) released its handbook on Indian Insurance Statistics for 2023-24, which detailed the performance of various Indian general and health insurers in claim settlement.The claim settlement ratio helps the policyholder to gauge what proportion or percentage of the claims an insurance company honours or pays out during a certain period, out of the total number of claims it has received during the same period.
So, for instance, say an insurer has a claim settlement ratio of 84%. This implies that for every 100 claims that the insurer received in a specific period, the insurer has typically honoured only 84 of those.
It is important not just to settle a claim but also to do so in a timely fashion. Most experts consider 3 months, or 90 days, to be the shortest yet optimum time for an insurer to process claims and honour the same, if all documentation is in place.
Another crucial aspect to consider while buying an insurance policy is the incurred claims ratio. This refers to what percentage or proportion of the total premium collected by the insurer during the year is paid out as claims by them. The higher an insurer’s incurred claim ratio is, the greater the amount out of their total premiums that the insurer is likely paying out as claims.
So, for instance, if a company registers an incurred claims ratio of 85%, it means that against every Rs 100 it collects as premium from policyholders, it only pays out Rs 85 in claims. However, a very high incurred claim ratio would mean the insurer is not left with adequate money to manage its business. So many experts recommend an incurred claim ratio between 70% and 90% to be an indicator of a good insurer in terms of claim experience and sustainability. A combination of a high claim settlement ratio and an incurred claims ratio can help you narrow down a good insurance policy. ET Wealth has analysed the data and presents to you the 5 fastest and slowest insurers in terms of claim settlement ratios and also their incurred claims ratio.
Which general insurer has the highest claim settlement ratio within 3 months in 2024?
According to IRDAI’s annual data, at 99.97%, Navi recorded the highest claim settlement ratio in FY23-24.
5 insurers with the fastest claim settlement ratio, as per IRDAI
| Insurer | % of health-insurance related claims paid within 3 months in FY23-24 |
| Acko | 99.91% |
| HDFC Ergo | 99.16% |
| Navi General Insurance | 99.97% |
| Reliance General | 99.57 |
| Universal Sompo | 98.11 |
Source: IRDAI handbook 2023-24
What stands out is that while Acko ranks the highest amongst all insurance companies in terms of claim settlement ratio (99.91%) in FY23-24, their incurred claims ratio (69.57%) is among the lowest compared to all general insurers. This indicates that the company is only paying approximately Rs 70 as claims out of every Rs 100 it collects as premium, despite its very speedy claim settlement.
Similarly, HDFC Ergo has an incurred claims ratio of 87.70%. NAVI, which boasts of settling 99.97% of its claims within 3 months, however, has a very low incurred claims ratio of 52.40%, implying that it pays out a little over half, or Rs 52 per Rs 100 of claim received.
Reliance General registered an incurred claims ratio of 81.06%, while Universal Sompo registered an incurred claims ratio of 81.74%.
Notably, none of these insurers, which recorded a claim settlement ratio of over 98% in FY 23-24, had an incurred claims ratio of over 90%. Hence, while their claim settlement mechanism might be speedy, there are concerns as to how much money they are paying out in terms of claims in comparison to the premiums collected.
Which general insurer has the lowest claim settlement ratio within 3 months in 2024?
Both New India Assurance and National Insurance are public insurers, which recorded claim settlement ratios of 92.70% and 91.18%, respectively. Also, at around 8.5 lakh (8,54,774), New India Assurance reported one of the highest numbers of outstanding claims at the end of FY24.
5 insurers with the slowest claim settlement ratio, as per IRDAI
| Name of Insurer | % of claims settled within 3 months in FY23- 24 |
| New India Assurance | 92.70 |
| National Insurance | 91.18 |
| Future Generali | 90.93 |
| IFFCO Tokio | 89.37 |
| Zuno | 83.12% |
Source: IRDAI handbook 2023-24
However, both New India Assurance and National Insurance fared better in terms of incurred claims ratio during FY23-24. While National Insurance reported an incurred claim ratio of 95.9%, New India Assurance had an incurred claim ratio of 97.36%. This indicates that while their claim settlement ratio might be relatively lower than their peers, they are paying out more money in premiums.
With an incurred claims ratio of 71.85% in FY23-24, Future Generali ranks relatively lower, both in terms of claim settlement ratio (90.93%) and in terms of claim amount paid out. While IFFCO Tokio paid out 86.33% per Rs 100 of the premium collected, Zuno’s incurred claim ratio stood at 82.64%.
Which stand-alone health insurers have the lowest claim settlement ratio?
Among the 5 existing stand-alone health insurers in the country, at 99.87%, Star Health had the lowest claim settlement ratio within 3 months between April and December 2024. Note that these companies operate exclusively in offering health insurance and related products.
| Name of the stand-alone insurer | % of claims paid in less than 3 months during 2023-24 |
| Aditya Birla Health Insurance Co. Ltd. | 92.97 |
| Care Health Insurance Ltd. | 92.77 |
| ManipalCigna Health Insurance Co. Ltd. | 88.59 |
| Niva Bupa Health Insurance Co. Ltd. | 92.02 |
| Star Health and Allied Insurance Co. Ltd. | 82.31 |
Source: IRDAI Handbook 2023-24
At 57.69%, Care Health registered the lowest incurred claims ratio among all stand-alone insurers in FY23-24. They were followed by Niva Bupa, which stood at 59.02%. Star Health has an incurred claims ratio of 66.74%, indicating that for every Rs 100 it collects as premiums, it only pays out around Rs 66 as claims to policyholders. Aditya Birla Health Insurance ranked first amongst standalone health insurers, both in terms of claim settlement (92.97%) and incurred claims (68.31%).
Should you only consider the claim settlement ratio while choosing an insurance policy?
While checking the claim settlement ratio is important, given that consumers largely pay regular premiums to get hassle-free claims in case of a medical emergency, it should not be the only factor.
Says Chetan Vasudeva, Senior Vice President of Business Development at Elephant.in, Alliance Insurance Brokers, “Claim settlements become even more significant during medical crises, as the patient and family are already distressed with the health of the patient. Delays over 30 days, without communication and valid reasons, can be interpreted as operational inefficiency or inadequate service from the insurer.
“While claim settlement ratio is a key metric in health insurance, it should be part of a broader checklist when evaluating an insurance provider. Consumers should also look at the other benefits provided in the health insurance policy, like the company’s customer service, policy exclusions, benefits in the health insurance policy, and solvency ratio, which reflects the financial health of the insurer,” he further explains.
