HDFC ERGO vs Niva Bupa Health Insurance Review

If you are debating whether you should avail of a health insurance plan (the answer is YES), this comparison is for you! If you are confused about choosing between the two insurance whales in the market - this comparison is for you!

Health insurance policies have become one of the industry's most popular financial protection tools that safeguard your savings during hospitalisations, surgeries, extensive medical procedures/treatments, etc. However, several players emerged as the demand for health insurance plans increased, increasing the choices for policyholders.

A lot depends on the choice of insurers offering health insurance plans. A credible insurer equates to better claim settlement experiences and vice-versa. And since your priority is opting for a health insurance policy that ensures smooth claim settlement, you must choose the best possible insurer.

In terms of insurers, 2 household names have grown popular over the last decade or so - HDFC ERGO and Niva Bupa. While both insurers offer ample comprehensive health insurance plans with industry-first features, the question is, which of these insurers is a better choice?

Let’s find out!

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HDFC ERGO Health Insurance or Niva Bupa Health Insurance: Which is Better?

Established in 2002, HDFC ERGO, a joint venture of HDFC and ERGO International AG, is India's largest general insurance provider, earning credibility in health insurance.

Niva Bupa, formerly Max Bupa, founded in 2008, is a standalone health insurance provider with a decade of growth in online insurance. Though popular, its operational efficiency poses challenges. However, it offers innovative, comprehensive plans at affordable rates.

This is a theoretical comparison of the two top insurers in the industry as per our and our client’s experiences. But, when ranking insurers, we rely on a few metrics which justify our recommendations. Take a look at how these metrics work out for HDFC ERGO and Niva Bupa -

1. Claim Settlement Ratio

Claim Settlement Ratio (CSR) indicates the percentage of claims settled by the insurer against the number of claims raised to the insurer across a year. It is calculated by -

Claims settled / (Claims Raised to the insurer across a year) * 100

When the IRDAI calculated the “Claims raised towards an insurer,” they included Claims raised in a year + remaining claims from the last year and deducted the total number of claims left outstanding in the year.

Any CSR above 90 indicates a decent insurer, while anything below 80 is not an insurer that you should approach. On the other hand, you can also find insurers who have a CSR above 100. Point to be noted: they are a no-go since these numbers reflect the outstanding claims from the last year that have been settled this year. This is indicative of issues across the operational efficiency of the insurance provider.

Coming to HDFC and Niva Bupa’s CSR’s -

We took an average of 3 years to understand the insurer’s overall performance better.

CONCLUSION: While CSR is not the only metric to determine the credibility of an insurer, in this comparison between HDFC ERGO and NIva Bupa’s CSRs over 3 years, we find HDFC ERGO to have the upper hand!

2. Incurred Claim Ratio

A health insurance provider's incurred claim ratio indicates its financial stability and long-term sustainability in the industry. It is calculated by -

(Amount of claim settled in a year / Total amount of premiums collected in the year) * 100

• While an ICR of less than 50 (more premiums collected than claims settled) indicates a health insurer’s good business standing over higher profits, this is not good news for policyholders. It suggests that the insurer focuses more on profits than settling claims catering to their client's interests.
• In case the ICR is more than 100, the company is on the verge of a financial crunch, settling more claims than the premium it collects across the year. Chances are that soon enough, the insurer will be forced to take extraordinary measures to keep afloat. And so you may be looking at discontinued policies, hiked premiums, or rejection of valid claims.
• The ideal ICR should be between 50 and 70 (which can be a bit higher), reflecting a financially stable insurer equally focused on its business interests and client requirements. Premiums will likely be affordable, and the chances of claim rejections will be lower.

Coming to HDFC and Niva Bupa’s ICRs -

CONCLUSION: ICR can’t be the sole metric in determining whether HDFC ERGO or Niva Bupa is a better insurer. Much like the Claim Settlement Ratio, ICR fails to reflect the time taken to settle claims. However, in this comparison between HDFC ERGO and Niva Bupa’s average ICR for 3 years, although Niva Bupa’s numbers lie in the ideal range, HDFC’s slightly raised ICR reflects that the insurer is not stingy about settling claims (for the sake of ensuring business profits). So, HDFC Ergo takes the win here.

3. Volume of Complaints

One of the best ways to determine the operational efficiency of a health insurance provider is by tracking the complaints raised against an insurer across a year. This is calculated by registering the number of complaints filed against the insurer for every 10,000 claims processed.

Now, in the case of HHDFC ERGO vs Niva Bupa, the numbers might be a tad bit misleading, considering that -

• HDFC ERGO is a general insurance company. And since the insurer is also involved in motor insurance products, the complaint volume is lower because motor policies have a lower complaint rate since there isn’t much to dispute.
• Niva Bupa is a standalone health insurance company (that sells travel insurance, too). Thus, with more things to dispute, its complaint volume tends to be higher than that of general insurers.

Here is how the complaint volume looks for HDFC ERGO and Niva Bupa -

CONCLUSION: While we have stated that since Niva Bupa is a standalone health insurance provider, its complaint volume can be higher than that of any general insurer, the numbers are not exactly promising (especially since other standalone providers are in the market with lower complaint volume). Moreover, as per our first-hand experience and client experiences, we know that Niva Bupa projects certain hurdles in terms of operational efficiency and claim settlement.

Thus, with respect to complaint volume, we find HDFC ERGO to be a better health insurance provider than Niva Bupa.

4. Network Hospitals

Health insurance providers with more network hospitals tend to be favoured by policyholders simply because more partner hospitals indicate higher chances of getting treated with cashless benefits.

So, as health insurance policyholders, if you are covered by an insurer with more network hospitals, you never have to worry about paying out of your pocket, whether it's an emergency or a scheduled treatment. While the insurer will reimburse the amount in these cases, there will be an extensive documentation process, not to mention the sudden financial dig-in you want to avoid at all costs.

Here’s a look at the number of network hospitals for HDFC ERGO and Niva Bupa -

CONCLUSION: HDFC ERGO has a 6-year advantage over Niva Bupa since it was founded in 2002 and NIva Bupa in 2008. We should have seen more partner hospitals for HDFC ERGO in that respect.

However, the numbers are close for both insurers, with Niva Bupa stealing the win.

5. Major Plans

Niva Bupa and HDFC ERGO are prominent and reputed health insurance providers with ample policyholders. Catering to their client’s needs, the health insurers have developed an extensive health insurance product portfolio that caters to diverse health and financial requirements.

However, not all health insurance policies from these two providers can be considered good picks for clients. Here is a look at the best health insurance plans from these two providers, their pros and cons -

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HDFC ERGO Health Insurance or Niva Bupa Health Insurance: What Should You Choose?

Niva Bupa and HDFC ERGO have had close calls with almost all the metrics. However, when it comes to complaint volume, the distinction is evident.

Now, irrespective of the

• comprehensiveness of the product portfolio,
• number of network hospitals,
• substantial business base, and
• years of experience in the industry,

-at the end of the day, what would matter the most is opting for a health insurance provider that gives you no grief over claim settlement. So, HDFC ERGO gets the edge over Niva Bupa despite the latter’s innovative feature collection in its policies.

However, when purchasing plans from HDFC ERGO, please remember that you will pay slightly higher premiums than Niva Bupa’s products.