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Health Insurance Claim Settlement Ratio

Q: What is TPA in health insurance?

TPA means Third Party Administrator . TPAs are the intermediaries between the policy buyer and the insurance company. The commission of the TPA depends on the health insurance plan chosen.

Team AckoNov 7, 2024

Buying a suitable health insurance policy is crucial because it eases your financial burden in case of covered medical issues and ensures that you get access to timely and quality healthcare. Since the role of a health insurance policy is so important, you must consider various factors while buying your plan.

One such factor is the Health Insurance Claim Settlement Ratio. In this article, you'll learn why this ratio matters while buying health insurance plan.

Contents

What is a Claim Settlement Ratio in Health Insurance?
Importance of Claim Settlement Ratio in Health Insurance
ACKO's Claim Settlement Ratio for FY 2023-24
Types of Health Insurance Claim Ratios
Difference between Incurred Claim Ratio and Claim Settlement Ratio
How does the Claim Settlement Ratio help?
Frequently asked questions

What is a Claim Settlement Ratio in Health Insurance?

The Claim Settlement Ratio or CSR is the ratio between the numbers of claims made by the customers to the total claims obtained by the company. In simple terms, the CSR is the number of insurance claims (or death claims) settled by the insurance company.

Importance of Claim Settlement Ratio in Health Insurance

The Health insurance Claim Settlement Ratio helps the insurance buyers to make an informed purchase decision. If the ratio of the company is higher, it means that the customer satisfaction is higher.

ACKO's Claim Settlement Ratio for FY 2023-24

At ACKO, our goal is to approve valid claims quickly rather than to find reasons to unnecessarily deny them. This philosophy is reflected in our Claim Settlement Ratio. As our policyholders (current and prospective) should be aware of our best practices, we make an effort to make CSR-related information available on our website. We also refresh the data to the most recent dates. The only source you should trust and rely on for information about Claim Settlement Ratio, answers to any of your questions, information on our public disclosures, or any other information about the company is our website, www.acko.com. You can also contact us via email at [email protected] or call us on the toll-free customer care number 1800-266-2256.

Here is ACKO's Claim Settlement Ratio for FY 2023-24.

Category	Claim Settlement Ratio
Health Insurance	96.29%

Types of Health Insurance Claim Ratios

There are different types of Health Insurance Claim Settlement Ratios as per IRDAI. They are as follows.

Claim Settlement Ratio

The CSR or IRDAI Claim Settlement Ratio in health insurance is the percentage of insurance claims settled by the insurance company in a year. The formula for CSR is given below.

Total number of claims settled by the insurance company in a year / The total number of claims received by the insurance company in a year

Claim Repudiation Ratio

The Claim Repudiation Ratio is also called the Claim Rejection Ratio. It is the ratio between the insurance claims (or death claims) rejected by an insurance company to the total number of insurance claims (or death claims) received by the company. The formula of Claim Repudiation Ratio is given below.

Total number of death claims rejected by an insurance company in a year / Total number of death claims received by the insurance company in a year

Claim Pending Ratio

The Claim Pending Ratio is the ratio between the number of death claims over which the insurance company has not yet taken a decision and the total number death claims received by the insurance company. The formula of Claim Pending Ratio is given below.

Total number of undecided death claims / Total number of death claims received during the year

Difference between Incurred Claim Ratio and Claim Settlement Ratio

The following table highlights the differences between Incurred Claim Ratio and Claim Settlement Ratio.

Incurred Claim Ratio	Claim Settlement Ratio
Total value of the claims settled by the insurer / Total value of the insurance collected by the company.	Total number of insurance claims settled by the company / Total number of insurance claims received by the company.
The profit of the company can be determined using ICR.	Reliability of the company regarding settling claims shall be determined using CSR.

How does the Claim Settlement Ratio help?

The Claim Settlement Ratio determines the credibility of an insurance company. It is a major indicator of the company’s trust factor. Consumers usually tend to choose their insurance company based on the CSR of the company. The best insurance company Claim Settlement Ratio is always above 85%.

Frequently asked questions

Here are some common questions about Health Insurance Claim Settlement Ratio.

Is there anything like a best health insurance company Claim Settlement Ratio that I can solely rely on while buying a plan?

It’s best to consider CSR as one of the factors and not the sole factor while selecting a health insurance company. This way, your search will be holistic. For instance, you should also go through online reviews to check customer service that will determine how the claims were settled and not just rely on a statistic that states the extent of claim settlement.

Who calculates the CSR?

Insurance Regulatory and Development Authority of India (IRDAI). It is the sole authority to determine the process of calculating CSR. The regulatory body also has the power to change the status of CSR of the company in the middle of the financial year.

What is TPA in health insurance?

TPA means Third Party Administrator. TPAs are the intermediaries between the policy buyer and the insurance company. The commission of the TPA depends on the health insurance plan chosen.

Can CSR be more than 100%?

No, CSR cannot be more than 100%.

What is the best Claim Settlement Ratio of health insurance?

To simplify things, the best Claim Settlement Ratio of health insurance companies is 95% (around this number).

How to choose a company with a top Claim Settlement Ratio in health insurance?

Each health insurance company releases their Claim Settlement Ratio annually. You can compare insurers based on their CSR. However, you must also consider their quality of service, the scope of coverage, and the price of the insurance plan before getting insured.

Which health insurance company has the best Claim Settlement Ratio?

The companies that promptly settle their claims have the best CSR.

Can I pay my health insurance premium online?

Yes, it is possible to pay the health insurance premium online to buy a health insurance plan. Please visit this link to know more.

Will health insurance Claim Settlement Ratio comparison help me choose the best company?

Yes, comparing health insurance Claim Settlement Ratio can help you choose the best insurer. However, do consider other factors such as policy features, insurer’s services, etc., as well while choosing your insurer.

Should I consider the reputation of the insurer while choosing an insurance company?

Yes, you must consider the overall reputation of the insurer while choosing an insurance company as CSR is not the only factor. It is calculated based on the settlements made by the insurance company in the past one year.

Disclaimer: The content on this page is generic and shared only for informational and explanatory purposes. It is based on industry experience and several secondary sources on the internet, and is subject to changes.