Did you know that things like how good a reputation your preferred insurance company has in settling claims or how long it takes to settle them are key factors that define your experience with them? Things like how many claims an insurance company settles or rejects in a year are crucial in determining how consumer-friendly the provider is and how likely your potential claim is to get settled.
To ensure you have a smooth experience during a medical emergency, it is recommended that you pick an insurance company with a good settlement record. In this regard, you can easily track their performance by checking their health claim settlement ratio. A higher ratio above 90% suggests that the insurance company settled a majority of claims it received in a given period. Having an idea about this ratio can help compare different insurance companies. However, to do so, you must know what a claim settlement ratio is and how to check it.
What is the Health Claim Settlement Ratio?
When purchasing a health insurance plan we hope that the coverage will offer financial protection against medical emergencies. We all hope that when a medical situation arises we can count on the support of our existing health insurance plans. However, this help is not always guaranteed as the claim process comes with multiple terms and conditions and the flexibility of insurance providers. Then again, you can gauge an insurance provider’s likelihood of settling a claim by checking their annual claim settlement ratio for the last couple of years. A health insurance claim settlement ratio can be described as the percentage of claims settled by the insurance company out of the total claims the provider received in a year. This is why the higher the ratio the better is it for potential insurance buyers. The figure helps determine whether the insurance company can settle the claims of its customers. For instance, if a company receives 100 health insurance claims in a year and settles 98 of them, the provider would have a claim settlement ratio of 98%. This is because the claim settlement ratio is computed by dividing the total claims settled by the total claims filed in a year, multiplied by 100. A number closer to percent is deemed lucrative for insurance companies.
Notably, every year the Insurance Regulatory and Development Authority of India (IRDAI) releases a full report on the insurance sector, which includes details of claim payouts of health and general insurance insurance providers for a financial year. A close look at the report can help gain information about the insurance sector and claim settlement data of different insurance companies. A consistent record of a high claim settlement ratio suggests a decent financial standing of the insurance company and its customer-centric approach.
What is the Importance of Claim Settlement Ratio?
A health insurance claim settlement ratio can prove to be a crucial parameter for you when seeking a policy cover. It can help understand a health insurance company’s ability to settle policyholders’ claims. The metric is also deemed a crucial tool to compare health insurance providers as it reflects the constancy of insurers when settling policy claims. These features make the claim settlement ratio an excellent means to measure an insurance company’s reliability. Collectively, these features make it important to track the claim settlement ratio of preferred insurance policies closely along with other features to make an informed decision.
Steps to Check Health Insurance Claim Settlement Ratio (CSR)
Companies with a record of rejecting a high number of claims for consecutive years can be avoided when seeking an insurance provider. The best way to avoid them is to check their claim settlement ratio and compare different plans carefully.
You can easily check the claim settlement ratio of a health insurance plan in these ways –
- The Insurance Regulatory and Development Authority (IRDAI) releases an annual report on the insurance sector every year. This report features details about health, life, and general insurance policies and has a checklist of the health insurance claim settlement ratio of all industry players. This can also help you understand term insurance vs life insurance in terms of the insurer’s performance.
- You can check the health insurance claim settlement ratio of your preferred list of insurance providers by visiting the official site of the Insurance Regulatory and Development Authority. Navigate to the claim settlement report section to view the information. On the website, you can check the recent as well as previous years’ information and save the PDFs.
- Referring to the PDFs you can make a list of insurance providers with the highest claim settlement in recent years. Next, you should proceed to check the key features and limitations of the insurance provider’s health plans and check the terms and conditions to understand their overall scope.
- You can also visit the websites of your preferred websites individually and look up their claim settlement ratio. Every reputed insurance company displays its current claim settlement ratio on its website. However, it is recommended that besides the current year, you check the last couple of year’s reports and settlement ratios to understand how the company has fared in terms of claim settlement and take necessary steps accordingly.
When checking the claim settlement ratio, make sure to check the accompanying claim process and terms and conditions to understand how flexible the process would be for you. This insight will help you pick a plan with a hassle-free claim process and will also help prepare for contingencies better. Make sure to convey the same information to your family members so that they can plan the claim process during a medical situation.
Nowadays, health insurance plans come with high coverage and affordable insurance premiums. However, these features would not be of any use if you cannot access them during an emergency. This is why it is important to pick insurance plans from providers who are likely to settle claims during an emergency. To ensure this check their claim settlement ratio and compare different provider’s performance. This will help make an informed choice.
