Overview

The Claim Settlement Ratio (CSR) indicates an insurer's reliability by measuring the percentage of filed claims successfully paid out. The Incurred Claims Ratio (ICR) reflects the insurer's financial health by measuring the total claim amount paid against the total premiums collected. 

The industry average for CSR is 91.22% for FY 2022-25, while the industry average for ICR is 81.88% for the same period. At Ditto, our benchmarks are 90% and above for CSR, and a range of 55% to 85% for ICR.

This guide is for anyone trying to figure out the differences between claim settlement ratio vs incurred claims ratio.

Most people looking for health insurance in India come across the phrase "claim settlement ratio" within the first five minutes of research. Fewer have heard of the incurred claims ratio, and even fewer understand the impact of both the ratios. 

Using only one of these metrics to judge an insurer is a bit like judging a restaurant by the number of tables it has without checking how the food tastes. Both numbers need to be analyzed and read together.

This article breaks down what each ratio means, how it is calculated, where the data comes from, and how to use both when you are shortlisting a health insurer.

Not sure how to interpret CSR and ICR for different insurers? Book a free call or chat with Ditto's advisors on WhatsApp.

What Is Claim Settlement Ratio (CSR)?

Claim Settlement Ratio (CSR) is the percentage of the number of claims settled by an insurance company against the total number of claims received during a financial year. For example, if an insurer receives 100 claims and settles 97 of them, its CSR is 97%.

Quick Note: A 99% or 100% CSR can look impressive, but context matters too. A high ratio over a short window, say three months or a single year, is much easier to achieve than sustaining it over time. At Ditto, we look at the 3-year average across all metrics because one good year doesn't tell you how an insurer behaves when claim volume rises or circumstances change.

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What Is Incurred Claims Ratio (ICR)?

The Incurred Claims Ratio (ICR) represents the total value of claims paid out by an insurer relative to the total premiums earned during a financial year. The remaining amount can be used to cover operating costs, commissions, administrative costs, and more.

Understanding ICR helps you learn more about an insurer’s financial efficiency and sustainability in paying claims relative to its earnings.

Did You Know?

IRDAI defines ICR as “Net Incurred Claims to Net Earned Premium”. Because every insurer must follow this same formula in regulatory filings, you can confidently compare ICRs across companies without worrying about manipulation or creative accounting.

CSR vs ICR: Key Differences and Formulas

ParameterClaim Settlement Ratio (CSR)Incurred Claims Ratio (ICR)
What it measuresNumber of claims settled vs total availableClaim payouts vs premium collected
SourceCalculated from Insurer public disclosures, Form NL37IRDAI annual reports, direct numbers available for health
Ideal range (Ditto)90% and above55% to 85%
Higher meansMore claims are being resolvedMore premiums collected are being paid out as claims
Lower meansFewer claims are being resolvedInsurer is retaining more premium income
What it does not measureAmount settled per claimWhether individual claims are accepted
FormulaCSR = [Total claims settled / (Claims outstanding at the start of the year + Claims reported during the year - Claims closed without payment - Claims outstanding at the end of the year)] x 100Incurred Claims Ratio Formula: Incurred Claims Ratio (ICR) = (Net Claims Paid During the Year/ Net Premium Earned During the Year) x 100

For more details, refer to our guide on the differences between incurred claims ratio and claim settlement ratio.

Which Ratio Should You Actually Trust?

Both ratios are worth looking at, but neither should be read in isolation. Here’s how you should interpret claim settlement ratio and incurred claims ratio:

How to Interpret CSR?

    • 90% and Above: This indicates that the insurer has a strong, consistent track record of settling claims. It gives a reasonable degree of confidence that your valid claim will be honored. Many insurers like HDFC Ergo (97.61%), Care (95.45%), and Aditya Birla Health Insurance (96.25%) fall under this category.
    • 85% to 90%: Most claims get settled, but the insurer isn't at the top of the chart. Hence, it's worth looking at complaints, ICR, and plan features before making a final call. ICICI Lombard (86.81%), Star (88.63%), and TATA AIG’s claim settlement ratios (88.94%) fall under this category.
    • Below 85%: A CSR in this range can point to a higher chance of delays, partial settlements, or rejections. It doesn't mean your claim will definitely be rejected, but it's a signal to be more cautious.

How to Interpret ICR?

    • Above 85%: Ratios above 85% indicate high claim payouts. While this may look customer-friendly, consistently high ICRs (especially near or above 100%) can strain profitability and may lead to future premium hikes or tighter underwriting. Many public sector undertaking (PSU) insurers like Oriental (111.54%), United India (98.77%), and National Health Insurance (96.41%) fall under this category.
    • 55% to 85%: This is generally considered the healthiest range. It shows the insurer is paying a reasonable portion of premiums as claims while still maintaining enough margin for expenses, reserves, and long-term stability. Most financially sound private insurers, such as HDFC Ergo (81.62%), Bajaj (82.18%), and ICICI Lombard (79.47%), fall within this band.
    • Below 50%: A consistently low ICR may indicate very strict underwriting or conservative claim approvals. While the insurer may be financially strong, such a low ratio can sometimes signal higher claim rejections or limited payouts. It may also suggest that the insurer’s primary focus is on maximizing profits.

CSR vs ICR: Key Differences and Formulas

Insurer NameAverage CSR (FY 2022-2025)FY 2022-23FY 2023-24FY 2024-25
New India Assurance98.91%99.90%98.44%98.38%
Digit Health Insurance98.66%98.18%98.83%98.98%
Bajaj General Insurance96.78%96.85%96.16%97.32%
HDFC Ergo96.71%95.49%97.19%97.45%
Acko Health Insurance96.50%97.45%96.31%95.75%
SBI General Insurance96.14%94.20%98.08%96.13%
Aditya Birla Health Insurance95.81%95.95%95.61%95.88%
National Insurance Company94.61%95.60%94.68%93.56%
Universal Sompo94.20%100%93.39%89.21%
United India Insurance93.79%92.72%92.72%95.92%

All data for the top 10 claim settlement ratio health insurance companies are derived from public disclosures and from Form NL37 provided by insurers. Please note that the latest date is available till 2024-25, while 2025-26 is being compiled and updated by insurers. If you want to know more about the CSR and ICR figures of players beyond the top 10 insurers, check out Ditto’s data lab on health insurance.

Note: If you'd like to explore the detailed figures reported by insurers and the IRDAI in their annual disclosures and public reports, visit Ditto Data Labs, our proprietary repository of health insurance data, meticulously compiled, verified, and maintained by the Ditto team over the years.

How to Use These Ratios When Buying

    • Do not rely on a single year of data. Both CSR and ICR can swing significantly year on year due to pandemic years, large claims events, or business restructuring. A 3-year average is more stable and meaningful.
    • Cross-check against complaint volume. An insurer can have a good CSR and still generate high complaint volumes if partial settlements are common. HDFC Ergo, for example, has a complaint volume of just 9.28 per 10,000 claims, compared with an industry average of 27.06, making it one of the most consistent performers across all four metrics.
    • Then come the network hospitals, and our recommended range is 10,000+. 
    • Do not forget to review the insurer's annual business volume to ensure they are financially sound and stable enough to support a smooth claims settlement process.
    • Finally, remember that no metric covers everything. Policy wording, add-on availability, hospital network in your specific city, and customer service quality all matter at the time of a claim in ways that ratios cannot fully capture.

For more details on the credibility metrics, check out the infographic below:

Credibility Metrics for Health Insurance

Why Choose Ditto for Health Insurance?

At Ditto, we’ve assisted over 8,00,000 customers with choosing the right insurance policy. Why customers like Pallavi below love us:

Claim Settlement Ratio vs Incurred Claim Ratio
    • No-Spam & No Salesmen
    • Rated 4.9/5 on Google Reviews by 24,000+ happy customers
    • Backed by Zerodha
    • Dedicated Claim Support Team
    • 100% Free Consultation

Confused about the right insurance? Speak to Ditto’s certified advisors for free, unbiased guidance. Book your call or chat on WhatsApp with us now!

Conclusion

The incurred claims ratio and claim settlement ratio of health insurance companies are useful metrics, but neither is a shortcut to picking the right insurer. CSR tells you whether an insurer settles claims. ICR tells you whether it is financially balanced enough to keep doing so sustainably. Used together, with a 3-year average and cross-referenced against complaint data and network size, they give you a much clearer picture than either number alone.

To reiterate, we recommend looking for insurers with a CSR above 90% and an ICR between 55% and 85% as a starting filter, then building the full picture from there. For a detailed insurer-by-insurer breakdown, compare health insurance plans on Ditto’s website.

Frequently Asked Questions

What is a good claim settlement ratio for health insurance in India?

A good health insurance claim settlement ratio is 90% and above. At Ditto, we use this as our minimum benchmark when shortlisting any insurer. Based on 3-year averages for FY 2022-25 calculated from IRDAI public disclosures (Form NL37, Q4), insurers like Digit (98.66%), Bajaj General (96.78%), and HDFC Ergo (96.71%) consistently clear this bar. The industry average CSR stands at 91.22% for the same period. Anything below 85% is a signal to dig deeper into complaint ratios and plan features before committing.

Which health insurance company has the best claim settlement ratio in India?

Based on a 3-year average CSR for FY 2022-25 from IRDAI public disclosures, New India Assurance leads established insurers at 98.91%, followed by Digit at 98.66% and Bajaj General at 96.78%. However, the best claim settlement ratio in health insurance alone does not make an insurer the best overall choice. At Ditto, we evaluate insurers across five metrics, including ICR, complaint volume per 10,000 claims, gross written premium, and hospital network size, before making a recommendation.

Is a high incurred claims ratio good or bad for policyholders?

A high incurred claims ratio is not automatically good or bad; context is everything. An ICR between 55% and 85% is considered the healthiest range at Ditto, as it indicates the insurer pays a reasonable share of premiums as claims while remaining financially stable. An ICR consistently above 100%, such as Oriental Insurance's 111.54% for FY 2022-25, can signal financial stress that may eventually lead to premium hikes, capital infusion needs, or stricter claim approvals. An ICR below 50% may suggest overly conservative claim behavior.

Claim settlement ratio vs incurred claims ratio: What are the key differences?

The claim settlement ratio measures how many claims an insurer settles out of the total claims available for processing, making it a volume-based metric. The incurred claims ratio measures how much of the premium collected is paid out as claims, making it a rupee-value metric. CSR covers the insurer’s total business, including combined health, travel, and personal accident products. ICR covers health and personal accident business, with travel products excluded. CSR is sourced from insurer public disclosures via Form NL37, while ICR is published directly in IRDAI’s annual reports.

Does a high CSR mean my claim will definitely be approved?

No, a high CSR does not guarantee your individual claim will be approved. The health insurance claim settlement ratio reflects how an insurer performed across all claims in a given year, not how it will handle your specific case. Your claim can still be rejected if the treatment falls under a policy exclusion, non-disclosure of medical history, a waiting period has not been completed, or required documents are missing. Even an insurer with a 97% CSR can deny a legitimate-looking claim if the policy terms are not met.

Where can I find the official claim settlement ratio of health insurance companies?

The official data on the claim settlement ratio of health insurance companies are derived from Form NL37, which is part of each insurer's public disclosures filed with IRDAI and available at irdai.gov.in. The ICR is published separately in IRDAI's annual reports. Because IRDAI does not mandate a single standard formula for CSR, figures can vary across aggregator websites. At Ditto, we apply a consistent formula across all insurers using Form NL37 data for Q4 of each financial year, then take a 3-year average to smooth out year-on-year fluctuations.

How does the incurred claims ratio impact future premiums?

The incurred claims ratio is a direct indicator of an insurer's pricing sustainability. When an insurer's ICR consistently falls between 85% and 100%, it means the insurer is paying out nearly as much as or more than it collects in premiums. Over time, this can force the insurer to raise premiums or tighten underwriting rules for new buyers and renewals alike. This is why the incurred claim settlement ratio matters not just at the time of purchase but over the life of your policy. A stable ICR in the 55% to 85% range suggests more predictable long-term pricing.

Should I choose an insurer based only on claim settlement ratio?

Relying solely on the health insurance claim settlement ratio is not enough to make a sound decision. An insurer can have a 100% CSR and still generate high complaint volumes if partial settlements are common, or maintain a high ICR that leads to future premium hikes. At Ditto, we recommend cross-checking CSR with ICR, complaint volume per 10,000 claims (industry average is 27.06), gross written premium, and a network hospital count of 10,000+. Only when all five metrics are evaluated together does a clear picture of insurer reliability emerge.

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