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Incurred Claim Ratio of Health Insurance Companies for 2022

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Incurred Claim Ratio of Health Insurance Companies 2022

Latest Incurred Claim Ratio for 2022

Incurred claims ratio (ICR) is the ratio of total claims paid over the total premiums received by the health insurance company. While there are several key parameters in choosing a good health insurance plan, incurred claim ratio plays a key role. If you are planning to take a health insurance plan, you should always check latest incurred claim ratio. In this article we would provide details on Incurred claim Ratio (ICR) and Latest Incurred Claim Ratio of Health Insurance Companies for 2022?

What is Incurred Claim Ratio (ICR) of Health Insurance Companies?

Incurred Claim Ratio (ICR) is the ratio of the total amount of claims paid over the total premiums received by the health insurance company.

Let us explain with an example.

A health insurance company has received Rs 10 Crores towards health insurance premiums during a financial year. In the same year, it has paid claims worth Rs 7.5 Crores. The incurred claim ratio is 7.5/10 = 75%.

You can also check on How Incurred Claim Ratio works exactly?

Why it is important to know the Incurred Claim Ratio?

This ratio would help us to know how much money health insurance company is retaining them as profits.

Low Claim Ratio: If the incurred claim settlement ratio is low, means the health insurance company might be rejecting the claims and retaining majority amount as profits.

High Claim Ratio: If the claim ratio is high, means company is honoring all the claims and might be retaining a small amount as profits. Such model might not be sustainable in the long run as companies cannot exist without profits.

Moderate Claim Ratio: If the incurred claim ratio is moderate (e.g. 60% to 90%), the company has good underwriting standards in issuing a health insurance policy, as well as honoring the claims and retaining some amount as profits too. This is win-win situation for both customer and health insurance company too. This way you can filter one of the best health insurance plans.

Latest Incurred Claim Ratio of Health Insurance Companies for 2022

IRDA releases annual report every year during Dec/Jan period pertaining previous financial year. This annual report contains claim settlement ratios as well as incurred claim ratio.  The data pertain to 2020-2021, but released in Dec-2021. This would be used for 2022 for all analytical purposes.

Highlights of Latest Incurred Claim Ratio – Private Insurers – 2022

1) There are 25 private health insurance companies which have incurred claim ratio between 4.84% to 111.5%. The average incurred claim ratio is 78.44%, which have improved from last year 2021 (72.55%).

2) Edelweiss General has high incurred ratio of 111.5%, followed by Universal Sompo of 111.2% and Iffko Tokio 99.49%.

3) Generally, one should opt for health insurance plans where the insurance company ICR is 70% to 90%. There are 7 insurance companies which fall under this category.  Future General India Insurance, Acko General Insurance, HDFC Ergo General Insurance, ICICI Lombard General Insurance, Cholamandalam General Insurance, Bajaj Allianz General Insurance and Liberty General Insurance.

4) There are two health insurance companies which have very low incurred claim ratio i.e. Navi General Insurance of 26.78% and Shriram General Insurance of 4.84%.  One should always avoid health insurance plans from companies that has a low incurred claim ratio.

S No Insurer 2019-20 2020-21
1 Acko General Insurance 21.08 84.64
2 Bajaj Allianz General Insurance 81.96 77.31
3 Bharti AXA General Insurance 77.50 65.37
4 Cholamandalam MS General Insurance 40.67 77.35
5 Edelweiss General Insurance 113.05 111.57
6 Future Generali India Insurance 62.52 90.04
7 Go Digit General Insurance 51.83 63.80
8 HDFC ERG0 General Insurance 69.01 79.30
9 ICICI Lombard General Insurance 69.90 78.00
10 IFFCO Tokio General Insurance 95.66 99.49
11 Kotak Mahindra General Insurance 49.22 55.17
12 Liberty General Insurance 87.78 76.98
13 Magma HDI General Insurance 72.87 62.70
14 Navi General Insurance 34.69 26.78
15 Raheja DBE General Insurance 85.07 97.22
16 Reliance General Insurance 89.36 93.96
17 Royal Sundaram General Insurance 63.55 67.88
18 SBI General Insurance 50.54 60.72
19 Shriram General Insurance 96.64 4.84
20 Tata AIG General Insurance 66.61 67.27
21 Universal Sompo General Insurance 76.68 111.23
Private Sector Insurers Total 72.55 78.44

Highlights of Latest Incurred Claim Ratio – Standalone Health Insurers – 2022

1) There are 8 standalone health insurance companies and incurred claim ratio for 2022 is between the range of 45.6% to 94.4% with an average of 75.4%.

2) Star Health Insurance has high incurred ratio of 94.4%, followed by Manipal Cigna Health insurance ratio of 61.1%.

3) Generally, experts indicate that one should opt for health insurance plans where the insurance company ICR is 70% to 90%. There are no health insurance companies falling under this category.

4) There is one health insurance company where the ICR is below 50%, which is Reliance Health insurance.

S No Insurer 2019-20 2020-21
1 Aditya Birla Health insurance 49.08 49.99
2 Care Health Insurance 59.13 55.15
4 ManipalCigna Health Insurance 61.64 61.13
5 Max Bupa Health Insurance 53.51 56.09
6 Reliance Health Insurance 62.17 45.68
7 Star Health and Allied Insurance 65.91 94.44
Stand-alone Health Insurers Total 64.13 75.43

Highlights of Incurred Claim Ratio 2021 – Public Sector General Insurers

1) There are 4 public sector health insurance companies and incurred claim ratio for 2022 is between the range of 92.7% to 112.5% with an average of 101%.

2) Oriental health insurance tops in a incurred ratio of 112.5%, followed by the United India Health Insurance of 106.04%.

3) There are no health insurance companies which have below 50% incurred claim ratio.

S No Insurer 2019-20 2020-21
1 National Insurance 103.30 101.09
2 The New India Assurance 100.83 92.79
3 The Oriental Insurance 104.97 112.51
4 United India Insurance 104.24 106.04
Public Sector Insurers Total 102.91 101.02

Source: IRDA Annual Report 2020-21

Suresh KP

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