Health insurance policies have become financial and medical necessities. Much of this popularity can be attributed to growing medical inflation, which has become a great concern considering the rising cost of healthcare services. Now, while this popularity has brought several new health insurer players into the industry, it has also led to great confusion among potential policyholders. The marketing gimmicks of a more-than-perfect Claim Settlement Ratio (CSR) or hassle-free claim settlement process are major hurdles when choosing a health insurance provider.

Health insurance providers should set the tone for a long-term financial commitment to secure your savings during health scares. However, this would only be possible if the health insurer in question is credible enough to have assured long-term sustainability and can handle claim settlement in the long run.

This is where Incurred Claim Ratio (ICR) in health insurance comes into play.

What is Incurred Claim Ratio (ICR) in Health Insurance?

Incurred Claim Ratio (ICR) in health insurance is one of the crucial metrics in analysing the provider’s trustworthiness/credibility. It is calculated by drawing a ratio between the total amount of claims settled by an insurer across a year and the total amount collected via premiums by the provider in the year, and multiplying it by 100.

How to Calculate a Health Insurance Provider's Incurred Claim Ratio (ICR)?

To understand how to calculate the Incurred Claim Ratio of a health insurance provider, let’s take an example.

Say an insurer collected 100 crores in premiums across a year. For this same year, the brand settled claims of 75 crores. In that case, its ICR is given by -

(75/100) * 100 = 75%


What is the importance of Incurred Claim Ratio (ICR) for Health Insurers?

Each metric used to analyse a health insurance provider’s credibility holds a different significance. In the case of ICR, the importance is as follows -

  1. Future financial sustainability of the brand - An insurer’s ICR sheds light on its claim settlement intent. If the insurer is able to balance its business profitability and claim settlement requirement, then it speaks volumes about its strong financial foothold. Thus, you are looking at a brand with future sustainability that can be the perfect insurer for your long-term financial commitment.
  2. Claim Settlement Potential of an Insurer - A brand with an ideal ICR indicates that it’s balancing its responsibilities towards building a sizeable business profit without overlooking the claim settlement requirements. Hence, the brand is financially strong enough to settle its claims in the future, too. This means fewer chances of partial settlement or rejections of claims in the future. This is a great sign for its existing and potential policyholders.

How to Choose the Best Health Insurance Based on the Incurred Claim Ratio (ICR)?

Considering that you are now well-versed with what is Incurred Claim Ratio (ICR) in Health Insurance, its significance, and how to calculate it, let’s explore the the various ranges of ICR and what it indicates about a health insurer -

CASE 1: If the ICR is below 50

This is indicative that the insurer is a tad bit more focused on accumulating its business profits. Thus, you can expect your claim settlements to fall in between the cracks, i.e. partial settlements or rejection of valid claims.

Recommendation: Steer clear of such insures.

CASE 2: If the ICR is between 50 and 70 (or slightly higher, in the 80s)

This is the perfect range of ICR. It shows that the insurer optimally balances its business profits and client requirements of claim settlements. This suggests that the insurer holds great financial sustainability for the future. Even if the numbers are in the 80s, that’s good to go, considering that, in this case, the insurer is prioritising its client requirements a bit more than its focus on profits, which is feasible considering it has the financial bandwidth to afford this prioritisation.

Recommendation: This is an excellent insurer to go ahead.

CASE 3: IF the ICR is above 100

The insurer, in this case, is paying more in claim settlements than it is earning in premiums. While this might seem appealing, you can be sure this is a temporary fix. With such expenses, chances are high that the insurer may soon face a financial crunch, leading to instability in its future sustainability.

Recommendation: Avoid such insurers.

What is the Incurred Claim Ratio (ICR) of the Best Health Insurers for 2024?

The Incurred Claim Ratio of a health insurer plays a crucial role when choosing a provider. This is well reflected if you take a look at the Incurred Claim Ratio of the top-notch health insurance providers in the country -

Incurred Claim Ratio (ICR) for 2024
Best Health Insurers 2020 - 2021 2021 - 2022 2022 - 2023 Average (2020 - 2023)
HDFC Ergo 79.3 97.47 79.04 85.27
ICICI Lombard 78 91.67 77.33 82.33
Bajaj Allianz 77.31 90.64 74.27 80.74
Tata AIG 67.27 86.53 78.33 77.38
Care 55.15 65.07 53.82 58.01
Niva Bupa 56.09 62.12 54.05 57.42
Industry Average 78.27 91.79 78.81 82.96

(Please Note 1: The above ranking of the best health insurance providers is based on the Incurred Claim Ratio from 2020 to 2023.

Please Note 2: We have drawn the average of the last 3 years better to understand the insurers' consistency and ICR performance. We then drew an average of the 3 years and tallied them against the industry average.

Please Note 3: If you are looking for the Incurred Claim Ratio (ICR) in Health Insurance for 2024, you must look at the number from the last financial year, i.e., 2022 - 2023. However, since a year’s data cannot suffice due to the chances of inconsistencies across data, we have taken the data of the last 3 years.)

What is the Difference Between Incurred Claim Ratio (ICR) and Claim Settlement Ratio (CSR)?

When determining the credibility of a healthy insurance provider, you need to factor in quite a few metrics, namely, the Claim Settlement Ratio (CSR), the Incurred Claim Ratio, complaint volume, the number of network hospitals, and the average annual business.

Among these, two of the most common and confusing (owing to the phonetic similarity) are Claim Settlement Ratio (CSR) and Incurred Claim Ratio. So, let’s take a quick look at the difference between Incurred Claim Ratio and Claim Settlement Ratio -

ICR and CSR Information
Parameters Incurred Claim Ratio (ICR) Claim Settlement Ratio (CSR)
Calculation ICR = (Total amount of claims settled in a year by an insurer / Total amount of premium collected by the provider over the year) * 100 CSR = (Total number of claims settled by an insurer across a year / Total number of claims raised to the insurer across the year) * 100
Example An insurer collects 100 crores in premiums in 2023 and settles 75 crores in claims in 2023. ICR = (75/100)*100 = 75% An insurer receives 100 claims across 2023. The provider settled 95 of the claims in 2023. CSR = (95/100) * 100 = 95%
Ideal Range 50 to 70 (numbers in the 80s, too, is good to go) 90 to 100
Best Health Insurers HDFC ERGO
Aditya Birla
Bajaj Allianz
Max Bupa (Niva Bupa)
ICICI Lombard
Bajaj Allianz
Tata AIG
Niva Bupa


When dealing with a health insurance plan, you are paying premiums to financially secure yourself during times of medical crisis. Considering the increased price of healthcare services, opting for a health insurance plan has become essential. However, following the rising cost of medical care, health insurance premiums are also on the rise.

So, when choosing a health insurer, you have to be cautious of selecting a brand that will stay on in the industry for the long run, thereby ensuring that you are spared from any inconveniences like the sudden loss of perks like No-Claim Bonus (for every claim-free year, your base amount gets boosted by a pre-decided %) in case you have to shift to another provider. You can always compare health insurers, their metrics, and product portfolios before finalising an insurer or approaching an expert for better support.