A subsidiary of the Sundaram Finance Group, the Royal Sundaram General Insurance Co. Ltd. (formerly Royal Sundaram Alliance Insurance Co Ltd) was India's first private general insurance company. While the insurer lacks the brand equity that brands like ICICI, HDFC, Caree, and Star hold, Royal Sundaram has an excellent lineup of comprehensive and feature-rich insurance products.
Royal Sundaram is also doing well as a health insurer, considering its great Claim Settlement Ratio and Incurred Claim Ratio, a great network of partner hospitals, and more. On the other hand, what’s a bit concerning is that the insurer does not have an in-house team for claim settlement (it has a Third-Party Administrator involved), and its plans can sometimes be a tad bit pricey.
Now, if you are wondering whether you should be availing of health insurance plans from this stable or not, the first step is determining its credibility, and the second step is analysing its policies. Let’s start!
Metrics of Royal Sundaram Health Insurance
Royal Sundaram General Insurance Co. Ltd. started its operations in 2000 as a joint venture between Sundaram Finance, an NBFC in India and Royal & SunAlliance Insurance plc, UK. However, 75% of the share has now been acquired by Sundaram Finance and the rest by other Indian shareholders. Being in the health insurance industry for a long time, the Royal Sundaram Health Insurance Company has an extensive insurance track record, which extends the much-required industry experience to this provider.
Subsequently, the insurer taps into this experience and has introduced some plans that can compete with the top-notch health insurance policies in the market. Some are pretty comprehensive and come with unique features. However, one major issue with the plans from this stable is that some of the policies can be a bit pricey.
But before we delve into the details of the health insurance policies from Royal Sundaram, let’s first look into its credibility -
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Claim Settlement Ratio of Royal Sundaram Health Insurance
Policyholders typically review a health insurer's Claim Settlement Ratio (CSR) as a critical metric before considering any provider. While CSR isn’t the sole metric for assessing a health insurance provider's reliability, it remains a crucial determining factor. CSR is calculated as follows:
(The total number of claims settled in a year by an insurer / The total number of claims raised in the year to the insurer) * 100
- Below 80 - If a CSR falls below this mark, the insurer is not recognised for efficient claim settlements. As a policyholder, avoiding such providers is advisable due to the heightened risk of claim rejections.
- Above 90, but below 100—This range represents optimal performance for health insurers. Such providers are esteemed for their excellence in CSR, and opting for such insurers ensures selecting a reputable provider.
- Above 100 - Despite being marketed as exceptional insurers, a CSR surpassing 100 is a warning sign, suggesting delayed claim settlements. Since this concerns health insurance claims, the last thing you want is any delay in the settlement process, potentially leading to tapping into your savings, even temporarily, which undermines the purpose of having health insurance plans.
| Years | CSR for Royal Sundaram Health Insurance | Industry Average |
|---|---|---|
| 2020 - 2021 | 92.55 | 91.484 |
| 2021 - 2022 | 93.35 | 89.967 |
| 2022 - 2023 | 93.42 | 91.460 |
| Average (2020 - 2023) | 93.11 | 90.970 |
Insight: The Cliam Settlement Ratio numbers have been great for Royal Sundaram for the past 3 years. With a consistent 90+ number over the years, the insurer has upped the industry average each year. This is a good start for the insurer to establish its credibility.
Incurred Claim Ratio of Royal Sundaram Health Insurance
While CSR offers an overview of an insurer's settled claims throughout the year, further insights are imperative. Understanding a health insurer's future sustainability and potential for claim settlement is crucial. This is where an insurer's Incurred Claim Ratio (ICR) becomes valuable. The ICR is determined by:
(The amount of claim settled by the insurer in a year / The total amount collected by the insurer via premiums in the year) * 100
- If the ICR falls below 50, the insurer is likely prioritising its business interests over complete claim settlements. This raises concerns for policyholders, who may encounter rejection or partial settlement of their valid claims.
- An ICR between 50 and 70 is optimal for health insurance providers. Insurers within this range (which may slightly exceed it) demonstrate a balanced focus on settling policyholder claims and ensuring business stability.
- If the ICR exceeds 100, it suggests that insurers excessively compensate policyholders for claims. While initially advantageous for policyholders, this may lead to long-term challenges. A high frequency of claims settlements indicates that the insurer may soon face financial difficulties and brand sustainability issues.
| Years | ICR for Royal Sundaram Health Insurance | Industry Average |
|---|---|---|
| 2020 - 2021 | 67.88 | 78.27 |
| 2021 - 2022 | 90.22 | 91.79 |
| 2022 - 2023 | 83.36 | 78.82 |
| Average (2020 - 2023) | 80.49 | 82.96 |
Insight: Except for once (2021 - 22), when the ICR numbers crossed 90 (exception, considering the pandemic outbreak), the ICR numbers have been good so far. While it’s true that the numbers crossed 70 (our recommended threshold), it merely suggests that the insurer has shifted its focus to prioritising client requirements of claim settlement. This is a good sign for its existing and potential policyholders. However, the numbers have fluctuated over the years, which is a bit concerning.
Complaint Volume of Royal Sundaram Health Insurance
As a prospective policyholder, your foremost concern when selecting a health insurance provider is finding a brand that offers a seamless claim settlement process. You must examine the data concerning an insurer's complaint volume to verify this. The greater the complaint volume (calculated as the number of complaints per 10,000 claims), the less likely you are to find a reputable provider (as complaints against health insurers predominantly revolve around policyholders' claim settlement encounters).
| Years | Complaint Volume of Royal Sundaram Health Insurance | Industry Average |
|---|---|---|
| 2020 - 2021 | 8.87 | 13.212 |
| 2021 - 2022 | 15.75 | 35.969 |
| 2022 - 2023 | 19.68 | 19.578 |
| Average (2020 - 2023) | 14.77 | 24.029 |
Insight: This is where we are a bit worried - Royal Sundaram’s complaint volume seems to be rising over the years. This is not a good situation for its policyholders, considering that it reflects the deteriorating condition of its overall operational efficiency. However, since Royal Sundaram has good numbers across its other credibility metrics, we hope the numbers improve over the next few years.
(Please note: We have taken the metrics data from the last 3 years to better understand the consistency of the brand’s performance. We have drawn an average of the 3 years and tallied them against the industry average.)
Top Health Insurance Plans Offered by Royal Sundaram Health Insurance
This is actually a classic offering from Royal Sundaram Health Insurance's stable. The policy is pretty comprehensive, with few restrictions or sub-limits. The plan offers a list of perks—no copayment, no room rent restrictions, no disease-wise sub-limits, daycare treatment coverage, pre- and post-hospitalisation expense coverage, AYUSH coverage, and more. However, the plan has few caveats and, unfortunately, on very crucial features, making it an average pick.
Drawbacks: The plan only offers a cover amount of up to ₹4 lakhs, which is too limited to accommodate policyholders' diverse financial and medical needs. There is a sub-limit on the domiciliary coverage of up to ₹20,000. The waiting period for pre-existing diseases is an extensive 4 years. The No-Claim Bonus is also capped at a maximum of 50%.
Considering its comprehensiveness and affordability, this is a good pick from the stable of Royal Sundaram Health Insurance. There are not many restrictions on the plan, and the features are value-worthy - no copayment, no room rent restrictions, no disease-wise sub-limits, pre and post-hospitalisation coverage, daycare treatment coverage, domiciliary treatment coverage, a No-Claim Bonus of up to 100% of the base sum insured, and free annual health checkups, among other perks.
Drawbacks: The AYUSH coverage has a sub-limit of up to ₹30,000, and the waiting period for pre-existing medical conditions is up to 3 years. While the waiting period is still acceptable, we would have much preferred it to be 2 years, like any other top-notch health insurance policy.
This is one of the most comprehensive health insurance plans that there is - it is a complete package with multiple standard offerings and a few premium features (OPD, international coverage, and maternity coverage). Among its other features are - a massive coverage ranging from ₹25 lakhs to ₹1.5 Crores, no copayment, no room rent restrictions, no disease-wise sub-limits, pre and post-hospitalisation coverage, 2 years waiting period on pre-existing medical conditions, daycare coverage, domiciliary coverage, free annual health checkups, No-Claim Bonus of up to 100% of the base sum insured, and more.
Drawbacks: If you have a cover of ₹25 lakhs, the maternity coverage has a capped amount of ₹2 lakhs. The international coverage is also capped at 50% of the sum insured, up to a maximum of ₹20 lakhs, and the cap for OPD is at ₹10,000/year. There is also a limit on the restoration perk. Apart from all this, a significant issue with this plan is that the premiums are pretty expensive.
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Conclusion
Royal Sundaram Health Insurance can be a good pick if you don’t have any loyalties associated with any of the other big names in the industry. The insurer has encouraging metrics that reflect its credibility and 10,000+ network hospitals. However, we suggest focusing closely on the complaint volume, making sure they are decreasing, and choosing a plan after analysing your financial bandwidth and medical goals.
