How Does Incurred Claim Ratio Of 2018-19 Affect Health Insurance Sector?

Mumbai, January 26: Before buying any health insurance. However, it is important to check the health status of the insurer to avoid rejection of claim at the time of medical emergencies. There are many ways to check before buying any health insurance. However, one of the most important criteria is claim settlement ratio of the insurer. Higher the incurred claim settlement ratio lower the chances of rejection of health insurance claim.

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What is incurred claim ratio?

Incurred claim ratio means a ratio of the total premium collected to the total claim amount paid by a non-life insurers within a financial year. 

Every year Insurance Regulatory and Development Authority of India (IRDAI) updates the latest insurance industry data at a glance through its annual report. According to IRDAI’s 2018-19 annual report all the four public sector non-life insurers incurred claim ratios are more than 100 per cent. This means they are under loss.

Among private non-life insurers, the incurred claim ratio of Edelweiss General Insurance is 115 per cent and IFFCO Tokio General Insurance is 102 per cent. This means only these two non-life insurers are under loss. However, all the seven standalone health insurers’ incurred claim ratios are ranging from 14 to 63 per cent. This shows that all the standalone health insurers are doing well and making profit.

For instance, for every Rs 100 premium if an insurer is paying Rs 98 as a claim for a year, it means the insurer is earning a profit of Rs 2 as the income is more than the expenses. On the other hand, if an insurer is collecting a premium of Rs 100 and paying Rs 105 as a claim for a year, this indicates the insurer is making a loss of Rs 5, since the income is less than the expenses.

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However, insurers cannot deny a genuine health insurance claim. According to industry experts one should always check the health status of the insurer before making any decision to avoid rejection of claim at the time of medical emergencies.

Source: IRDAI