When choosing a health insurance policy, you probably check the premium, coverage, and network hospitals. But there’s one number that most people skip: the Incurred Claim Ratio (ICR) in health insurance.

This underrated metric can reveal a lot about your insurer’s credibility- and that’s not something you want to overlook. Why? Because when life throws a medical emergency your way, you need more than just a fancy policy on paper. You need an insurer who’s reliable and transparent and pays up. 

That’s where ICR comes in. It gives you a behind-the-scenes look at how an insurance company handles claims and whether it’s financially stable enough to support you when it counts. 

Curious yet? Good. But don’t worry- we won’t get all technical on you. Just enough to make sure you’re not caught off guard when you need help the most.  

Before we break it all down, let’s take a look at the incurred claim ratio of care health insurance, Aditya Birla, HDFC Ergo, ICICI Lombard, and others:

Name of the Company Avg ICR (2021-2024)
Aditya Birla 68
Care 59
HDFC Ergo 86
ICICI Lombard 83
Max Bupa (Niva Bupa) 58
Star 73
Tata AIG 81
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What is the Incurred Claim Ratio (ICR) in Health Insurance Policies?

The incurred claim ratio is simple:

It is the percentage of total claims paid by an insurer compared to the total premium collected in a financial year. It helps policyholders understand how efficiently an insurance company handles claims and whether it is financially sustainable in the long run.

ICR vs Claim Settlement Ratio (CSR) in Health Insurance Plans 

Many confuse ICR in insurance with the Claim Settlement Ratio (CSR), but they serve different purposes:

    • Claim Settlement Ratio (CSR): This is the percentage of claims settled by an insurer out of the total number of claims received in a year. 

      CSR = (Total number of Claims Settled in a year by an insurer/ Total number of Claims Received) *100
    • ICR = Focuses on the financial aspect - how much of the premium collected by the insurer across a single year was used to settle claims. 

Both are essential, but ICR gives more profound insights into an insurer’s financial stability.

In a nutshell, CSR measures trust as it tells you how likely your claim is to be approved, while ICR measures health and tells you whether the insurer is financially balanced and responsible.

How is ICR Calculated?

ICR= (Total Amount spent in settling claims across a year by an insurer/Total Premium Collected by the insurer in the year) * 100

For example, if an insurance company collects ₹100 crores in premiums and pays ₹70 crores in claims, the ICR is 70%.

Why is the Incurred Claim Ratio in Health Insurance Important?

ICR helps you understand:

    • How much an insurer spends on claims versus how much they earn.
    • If the ICR is too high and continues this way, it could affect the company’s ability to stay financially strong in the long run. 
    • Whether an insurer is too strict with claims (a very low ICR could mean frequent claim rejections).

Pro Tip: You can check the incurred claim ratio of health insurance companies in the IRDAI Annual Report, which is published every year.

And trust us- this isn’t just some boring stat to gloss over. Why does it matter? So, here’s the thing: buying health insurance isn’t just another task to tick off your list. It can have a huge impact on your financial and overall well-being. The insurance provider you choose will play a major role in determining the kind of healthcare you’ll receive- whether it’s smooth cashless hospitalization or stressful claim rejections. A company with a poor ICR might partially settle claims, delay them, or worse- reject them altogether. 

So yes, checking the ICR is crucial if you want peace of mind, quality healthcare, and financial protection when you need it most.

How to Interpret the Incurred Claim Ratio (ICR) in Health Insurance Plans?

ICR Range What It Indicates?
Above 90% The insurer is paying more in claims than it earns in premiums. This could indicate financial instability.
Between 50-80% The ideal range! The insurer is settling claims efficiently while maintaining financial stability.
Below 50% The company is collecting more premiums but settling fewer claims, which might mean a high rejection rate.

Friendly Note: High ICR doesn’t always mean trouble. While an ICR above 80% might raise concerns about an insurer’s profitability, it doesn’t automatically mean the company is in financial trouble. Some long-established insurers might have a high ICR now and then but remain financially strong due to their scale, strategy, and customer-first approach. 

These companies have earned a strong reputation through consistent claim settlements, wide hospital networks, and transparency. Policyholders can consider sticking with them for the reliability they offer- even if the ICR is on the higher side. 

The key is to always look at the bigger picture. 

    • Public sector insurers often have a high ICR as they cover a broad customer base, including high-risk groups.
    • General insurance companies (which offer health, motor, and travel insurance) have an ICR of 70-80% due to their diversified products.
    • Standalone health insurance companies specialize in health insurance and typically maintain ICRs between 50-70% due to stricter underwriting.

Public vs. Private vs. Standalone Health Insurers: Who Has the Best ICR?

While evaluating health insurance companies in India, understanding the ICR across different types of insurers- public sector, private sector, and standalone health insurance companies can provide valuable insights into their claim settlement practices and financial health. 

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Public Sector Health Insurance Companies
India has four public sector health insurance companies, which generally have higher ICRs:

    1. New India Assurance: India’s largest public sector general insurer, offering a wide range of health insurance plans, but is known for longer claim processing times and less tech-friendly service. 
    2. United India Insurance: The insurer is particularly popular for affordable premiums and wide coverage, especially in rural and semi-urban areas. However, expect less responsive customer support and limited online claim assistance. 
    3. Oriental Insurance: Known as one of the oldest insurers in India, it offers plans perfect for families and senior citizens. However, the provider lacks the smooth digital experience that many private players offer today. 
    4. National Insurance: The insurer is well-known for its affordable policies and strong network, especially among government employees. However, paperwork-heavy procedures can be a pain point for many customers. 

Public insurers often report ICRs above 90%, which means they pay out a large portion of their collected premiums in claims. While this may sound great, the operational inefficiency might still cause problems and delays. The process can be slow and less tech-savvy. So, they’re a decent option if you prioritize trust and government backing, but they're not ideal if you want faster claim turnaround, digital support, or modern features.

Private Health Insurance Companies & ICR
Private insurers try to balance claim payouts and profitability, maintaining ICRs between 70-80%. Examples:

    • HDFC Ergo Health Insurance: Offers a wide range of health insurance products and boasts a CSR of 98% with a network of over 13,000 hospitals.  
    • ICICI Lombard Health Insurance: Provides comprehensive health insurance solutions with a focus on customer-centric services. 
    • Bajaj Allianz Health Insurance: A joint venture between Bajaj Finserv Limited and Allianz SE, this insurer focuses on client claim settlements while maintaining financial health. 
    • Reliance Health Insurance: Offers affordable health insurance plans with extensive coverage options. 
    • Tata AIG Health Insurance: Provides a variety of health insurance products with value-added services. 

Private insurers are best for people who value speed, service, and tech-driven processes. They offer a fine balance between affordability and efficiency, though sometimes premiums might be slightly higher compared to public insurers.

Standalone Health Insurance Companies & ICR

Standalone health insurers focus only on medical insurance, maintaining ICRs between 50-70%. Examples:

    • Care Health Insurance: Offers a variety of health insurance products tailored to individual and family needs. The insurer also has a claim settlement ratio of 90% and a network of over 11,000 hospitals. 
    • Aditya Birla: Provides comprehensive health coverage while maintaining a CSR of 95% and a network of more than 12,000 hospitals. 
    • Niva Bupa: Focusing on customer-centric health insurance solutions with an extensive hospital network of more than 10,000 hospitals. 
    • Star Health Insurance: India’s first standalone health insurance firm with a network of more than 14,000 hospitals. 
    • ACKO Health Insurance: Emphasizes a digital-first approach, offering seamless policy purchase and claim processes. 

Standalone insurers are a solid choice if you want health-focused expertise, innovative wellness programs, and tech-savvy claim processes. They typically offer faster approvals and more customizations, though premiums can be slightly higher than public insurers.

How Does ICR Affect Your Health Insurance Premiums? 

ICR plays a crucial role in determining your health insurance premium.

    • A high ICR suggests that an insurer is paying out more money in claims than it is collecting in premiums. While this shows that the company is fulfilling its promise, it could also indicate tight margins or losses. To recover from this and stay financially healthy, they might increase premiums in the future or revise the policy benefits. Moreover, if the company is unable to manage its finances well, it could also risk long-term sustainability. 
    • A low ICR might mean the company is making a lot of money in premiums but not paying out enough claims. While this sounds profitable for the insurer, it does raise some concerns regarding the difficulties faced by policyholders to get approvals. They might have lower premiums but what is the point of that if they don’t settle your claims once you get admitted? 
    • A balanced ICR is a sweet spot where the company is making enough money in premiums but also paying out its fair share of claims. This way they can stay profitable while maintaining stable premiums and ensuring fair claim settlement processes. 

This is why understanding the ICR in medical insurance is essential before purchasing a policy.

Should You Rely Solely on ICR When Choosing Insurance?

While ICR in insurance is an essential factor, it’s not the only thing that matters. It’s just one piece of the puzzle. A well-rounded decision should consider the following:

    • Claim Settlement Ratio (CSR): This shows how many claims the insurer actually settles out of the total received. A high CSR (95% and above) indicates that your chances of getting your claim approved are higher, and often, approvals are faster and smoother. After all, no one wants delays when there’s a medical emergency. 
    • Hospital Network: A wide network of cashless hospitals means you can get treated without paying upfront at more locations across the country. The bigger the network, the better your access to quality treatment without paperwork hassles. Especially if you’re traveling or living in smaller cities.
    • Customer Reviews & Complaints Volume: While numbers are great, real people’s experiences offer deeper insights. High complaint volumes or poor ratings can indicate issues like delayed settlements, hidden terms, or poor customer support- things you won’t find in official brochures.
Name of the Company Avg ICR (2021-2024) Avg CSR (2021- 2024) Complaint Volume (Number of complaints per 10,000 claims) Number of Network Hospitals
Aditya Birla 68 95 22 10,000+
Care 59 90 36.13 11,400+
HDFC Ergo 86 98 7.02 13,000+
ICICI Lombard 83 85 8.96 10,200+
Max Bupa (Niva Bupa) 58 91 42.62 10,000+
Star 73 83 46.1 14,000+
Tata AIG 81 96 10.8 11,000+

Why Choose Ditto to Buy Health Insurance?

At Ditto, we’ve assisted over 3,00,000 customers with choosing the right healthcare insurance policy. Here’s a look at why customers like Abhishek below love us:

Incurred Claim Ratio

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Final Thoughts on the Incurred Claim Ratio (ICR) in Health Insurance

Picking a health insurance policy isn’t just about ticking boxes- it’s a decision that could define the quality of healthcare you receive and how financially protected you are during emergencies. Sure, the incurred claim ratio is a great starting point- it tells you whether your insurer is financially healthy and generally fair with claims. But don’t stop there, research properly about the CSR, hospital network coverage, customer support, premium vs benefits, etc. If you skip the research, you risk claim rejections or partial settlements. You might even end up paying out-of-pocket in some instances, so beware. If you're still unsure about which health insurance plan suits you best, expert guidance can make all the difference. A little effort now can save you a lot of stress (and money) later. 

 

 

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