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Claim Settlement Ratio of General Insurers

Claim settlement ratio is the percentage of claims that an insurance company has paid out in a financial year compared to the number of claims received. This percentage is regarded to be a reliable metric for determining if an insurer comes to your rescue when the need arises. It is best to go for an insurer that has a high claim settlement percentage.

The Insurance Regulatory and Development Authority (IRDAI) releases the claim settlement ratios of all the insurance companies every year. While choosing an insurance company, make sure to look for the highest claim settlement ratio.

Claim Settlement Ratio of General Insurers

One of the crucial elements that underline the credibility of an insurance company, the Claims Settlement Ratio means the ratio of a number of claims that have been settled out of the total number of claims that the insurance company receives. The ratio measures the reliability of the insurance company in terms of paying the claims to the insured. It is said that the higher the ratio is, the better it is for the insurer.

Why Claim Settlement Ratio is Important?

Claim settlement ratio is a key factor to consider as it reflects the pattern of resolution of claims by an insurance company. Buying a general insurance policy is a long-term aim. Not only do you have to pay a significant amount of premiums over specific payment tenure to avail the policy benefits, you also have to be sure that your insurance policy documentation is well-rounded so that it doesn’t get rejected.

Thus, you need to compare and purchase a car, health insurance plan from an insurer with a high claim settlement ratio. Claims Settlement Ratio is a reliable measure that can help you determine if a certain insurance company is trustworthy or not and that your family will not have to move from pillar to post in getting the insurance benefit, after your untimely demise.

  • Financial Security: The entire objective of buying general insurance is ensuring financial protection against unforeseen circumstances. However, the purpose will be defeated if the insurer does not honour your claim. On the other hand, if the insurer honours most of the claims, your family is more likely to have a simple, transparent and hassle-free claim process. You can, thus, be rest assured that your loved ones don’t have to go through a tough for time getting the sum assured.
  • Reliability: The claim settlement ratio indicates their ability to pay the sum assured to you or your nominee. If your provider has been maintaining a consistently high CSR over a considerable amount of time, they are unlikely to default on their compensation commitment.

What is Good Claim Settlement Ratio of General Insurers?

The claim settlement is the ultimate goal of purchasing general insurance. The settlement of claim means the offering of compensation to policyholders for damage or loss to their cars. The car insurance claim can be settled in two ways which are cashless and reimbursement claim settlement, where the former is more preferred.

Claim settlement refers to the right of the policyholders that allows them to get reimbursement for the expenses incurred by them due to an accident or any other mishap involving the insured's vehicle. When a policyholder files a claim with an insurer, the latter indemnifies the former for the occurred financial liability as per the nature and scope of the insurance policy.

Insurers with more than a 97% claim settlement ratio are likely to offer a better claims experience to policyholders.

  • Overall, higher the percentage of the settled claims, better are the chances that your general insurance policy claim will be accepted and settled by the insurance company.
  • Another reflection of a high CSR is on the insurance company’s finances.
  • With settlement percentages up and above the 95% mark, a prospective general insurance buyer can be sure that the insurers are secure as they are willing to pay the insurance claim amount to most of their customers.

Car Insurance:

What is Car Insurance Claim Settlement Ratio?

Car Insurance Claim is the process under which car insurance policyholders requests the insurer to compensate for the expenses/damage incurred by him/her due to an unfortunate event involving his/her car. The amount and extent of the claim amount depend on the Insured Declared Value (IDV) of your car and the type of car insurance policy bought by you - third party, own damage or comprehensive.

The process where a car insurance policyholder requests the insurer to compensate for the damage incurred by him/her caused by an accident, theft etc. involving her/his car is a car insurance claim. The claim amount is determined concerning the Insured Declared Value (IDV) of the scar and the type of car insurance policy bought.

Claim Settlement Ratio of Car (2019-20):

The Insurance Regulatory and Development Authority of India (IRDAI), in its latest annual report, have given details of claim settlements of all car insurance companies for the year 2019-20. Navi Car Insurance has the highest claim settlement ratio in terms of number of claims with 150.69%. Out of the top 10 car insurers, nine have a claim settlement ratio of more than 98%. The table below presents the claim settlement ratio for the year 2019-20 in order of highest claim settlement ratio.

Insurer Claim-Settlement Ratio Network Garages
Private Sector
Acko 97.58 1300+
Bajaj Allianz 65.83 6000+
Cholamandalam MS 82.95 8500+
Edelweiss General 116.31 2000+
Future Generali 57.67 4000+
Go Digit 74.82 5800+
HDFC Ergo 79.21 6800+
ICICI Lombard(Bharti axa) 76.53 9700+
IFFCO Tokio 87.77 4300+
Kotak Mahindra 75.66 1300+
Liberty 70.95 4300+
Magma HDI 85.13 3390+
Navi 150.69 1100+
Raheja QBE 103.90 1300+
Reliance 84.63 6200+
Royal Sundaram 92.23 4600+
SBI General 92.05 5000+
Shriram 65.43 2000+
Tata AIG 80.29 5400+
Universal Sompo 89.54 3500+
Public Sector
National 116.44 3100+
New India Assurance 85.35 3000+
Oriental 101.63 2000+
United India 96.45 2000+

Types of Car Insurance Claim Settlement:

Cashless Claim: When you repair your car at an insurer authorised garage, you have entered a cashless claim settlement process. In this process, the policyholder does not have to pay any money to the garage authorised by the insurer for the repair, and the insurer directly makes the payment.

Process:
  • Intimate claim with insurer
  • Assessment of Damage Sustained
  • Towing and Repair of Car
  • Claim settlement.

Reimbursement Claim: If you repair your car at a garage/workshop outside the authorised network of the insurer, in that case, you will have to make a reimbursement claim. Initially, the policyholder makes the payment for the repair cost at the garage and then gets the repair cost reimbursed later from the insurer. The insurer reimburses the claim amount to the policyholder after factoring in the applicable deductible which might be compulsory or voluntary.

Process:
  • Claim Intimation
  • Survey and Inspection
  • Towing and Repairs
  • Final Reimbursement.

Car Insurance Claim

Documents Required for Car Insurance Claim Settlement:

You need the following documents at the time of claim settlement of your car insurance:

  • Duly signed and filled claim form
  • Insurance Policy Document
  • Car’s Registration Certificate (RC)
  • Driver’s licence (DL)
  • Pollution Under Control (PUC) Certificate
  • Original receipt/bills of repairs (in case of reimbursement claim)
  • FIR (in case of fatal injuries/accidents or third party liabilities)
  • A copy of PAN Card (if the claim amount is more than Rs. 1 lakh).
  • Duly signed Satisfaction Voucher (SV) or Discharge Voucher (DV)

Why Buy Car Insurance from Good Claim Settlement Ratio Company?

If you are a first-time car insurance buyer, it is natural that you may look for tips online to make the right buying decision. Browse through some reliable insurance portals, and you will find that one of the important tips that the experts recommend is to consider the reputation of the insurer.

They recommend that people should always select a reputed insurer having good claim settlement ratio for their car insurance no matter if they want to purchase third-party or comprehensive insurance.

  • Higher Claim Settlement Ratio
  • Hassle-free Claim Filing Process
  • Better Coverage
  • Competitive Premiums
  • Wide-Range of Add-ons
  • Wide range of Network garages
  • Easy online purchase and renewal.

How is Car Claim Settlement Ratio Calculated?

Claim settlement ratio is calculated by dividing the total number of insurance claims settled by the total number of insurance death claims received during the year by the insurer. A CSR is calculated with the following formula:

“Claim Settlement Ratio (CSR) = (Total number of claims paid in a year ÷ Total number of claims received in a year) x 100.”

The major aspects to note about CSR in India are as follows:

  • The ratio is calculated as the total claims approved
  • CSR is calculated and not just measured for a single product. You will find CSR for all insurance products by all insurance companies.
  • The claim settlement ratio should be consistent. While buying car insurance, one must always check the settlement ratio for the last five years of the company. If consistency in CSR is found, the insurance company can be relied on to settle car insurance claims.
  • If interested, you can also check the number of claims received by a specific insurance company you are interested in buying car insurance from.

Health Insurance:

What is Health Insurance Claim Settlement Ratio?

Health insurance claim settlement ratio is the ratio of claims paid out of the total number of claims received by an insurance company during a financial year. It is one of the most reliable factors that indicate if an insurance company handles the claims of the customers well or not.

Health insurance claim settlement is a procedure where a policyholder makes a request to his or her insurer in order to avail of the medical services listed under the health plan. With this, the policyholder can either receive a cashless treatment or can get reimbursement for availed treatment or health services. In short, a policyholder can ask the health insurance provider to offer cashless service as well as can submit a claim settlement form to seek reimbursement.

Claim Settlement Ratio in health insurance is one of the most vital factors to be considered while choosing a health insurance company as it tells you about the claim settling ability of the insurance provider. If the company is unable to settle the claims, then the whole purpose of purchasing insurance gets wasted.

There are several insurance companies that guarantee claim settlement within a stipulated period of time, provided it is a non-fraudulent one. Hence, the Claim Settlement Ratio or CSR of an insurance company reflects its reliability, which in turn, helps the policy buyers in decision making when planning to buy a new health insurance policy.

Claim Settlement Ratio for Health (2019-20):

The Insurance Regulatory and Development Authority of India (IRDAI), in its latest annual report, have given details of claim settlements of all health insurance companies for the year 2019-20. HDFC ERGO health Insurance has the highest claim settlement ratio in terms of number of claims with 73.69%.

The table below presents the claim settlement ratio for the year 2019-20 in order of highest claim settlement ratio.

Standalone Health Insurer Claim-Settlement Ratio Network Hospitals
Aditya Birla Health 49.08 9000+
HDFC ERGO 73.69 Nearly 10,000
Manipal Cigna 61.64 6500+
Max Bupa 53.51 7600+
Reliance Health 62.17 8000+
Religare Health(Care) 59.13 16,500+
Star Health 65.91 11,000+

Types of Health Insurance Claim:

Cashless Claim Settlement Method: When you get medical treatment at a network hospital with your health insurance, then you can attain a cashless claim. As per the Cashless Claim Settlement Procedure, you need not pay anything to the hospital for the treatment and medical services. The insurer directly pays to the hospital subject to the amount of the claim. You will need to pay only in case of co-payments or a sub-limit clause that you have chosen during the plan purchase.

Process:
  • Find the network hospitals
  • Intimate the insurer
  • Complete the documentation process
  • Claim settlement
  • Pay the bills.

Reimbursement Claim Settlement Method: If you get treatment at a hospital outside the network of the insurer, you set foot in a Reimbursement Claim Settlement Procedure. As per this process, you have to pay for the treatment at the hospital and get it reimbursed later on from the insurance provider subject to the amount of the claim. The insurer is liable to pay the entire amount of the claim after considering all the voluntary or compulsory sub-limits, deductibles, etc. opted by you at the time of purchasing the policyholder.

Process:
  • Intimate the insurer
  • Complete the documentation process
  • Payment of bills
  • Claim settlement

Health Insurance Claim

Documents Required for Health Insurance Claim Settlement:

Here are the following documents you need to have for the successful claim settlement of health insurance:

  • Original investigation reports
  • Pharmacy bills along with the prescription
  • Final hospital discharge summary
  • FIR or post-mortem report if happened
  • Original bills, receipts, and discharge report
  • Original hospital bills and a valid photo ID proof
  • Treating doctor's report, and original consultation notes
  • Nature of operation performed and surgeon's bill and receipt
  • Indoor case papers and duly-filled claim form
  • Test reports along with attending doctor’s or surgeon’s report.

Why Buy Health Insurance from Good Claim Settlement Ratio Company?

If you are a first-time health insurance buyer, it is natural that you may look for tips online to make the right buying decision. Browse through some reliable insurance portals, and you will find that one of the important tips that the experts recommend is to consider the reputation of the insurer.

They recommend that people should always select a reputed insurer having good claim settlement ratio for their health insurance no matter if they want to purchase standalone health insurance.

  • Higher Claim Settlement Ratio
  • Hassle-free Claim Filing Process
  • Better Coverage
  • Competitive Premiums
  • Wide-Range of Add-ons and plans
  • Wide range of Network hospitals
  • Easy online purchase and renewal.

How is Health Claim Settlement Ratio Calculated?

Claim settlement ratio is calculated by dividing the total number of insurance claims settled by the total number of insurance death claims received during the year by the insurer. A CSR is calculated with the following formula:

“Claim Settlement Ratio (CSR) = (Total number of claims paid in a year ÷ Total number of claims received in a year + outstanding claims at beginning of the year).”

The major aspects to note about CSR in India are as follows:

  • The ratio is calculated as the total claims approved
  • CSR is calculated and not just measured for a single product. You will find CSR for all insurance products by all insurance companies.
  • The claim settlement ratio should be consistent. While buying health insurance, one must always check the settlement ratio for the last five years of the company. If consistency in CSR is found, the insurance company can be relied on to settle health insurance claims.
  • If interested, you can also check the number of claims received by a specific insurance company you are interested in buying health insurance from.

What is the difference between Incurred and Paid Claims?

The Incurred Claim Ratio (ICR) is the proportion of the claims that are paid against the total premium that is received by the insurance company. On the other hand, paid claims are those that insure the policyholder against any financial loss that may occur due to medical treatments, damage of motor vehicle, and so on.

Incurred Claim Ratios are often confused or mistaken for the same as Claim Settlement Ratios. A claim settlement ratio is basically the ratio of settled claims to the total claims filed in a particular accounting period. Hence, in case the claim settlement ratio of a company stands at 90%, it means that 90 claims out of the 100 filed have been settled. The remaining 10% are either pending or rejected by the insurance company.

Which General Insurance Company has lowest Claim Settlement Ratio?

Aditya Birla general Insurance has the lowest claim settlement ratio of 49.08% in FY 2019-20. The claim settlement ratio is the ratio of the number of claims settled to the number of claims made. Claims may be rejected by general insurance companies for various reasons such as misrepresentation of facts, fraud, impersonation (acting), hiding accident or fraud, and pre-existing diseases, etc. It is hence important to ensure that you provide accurate information to the insurer at the time of purchase.

Which General insurance company has highest Claim Settlement Ratio?

Navi general Insurance Ltd has the highest claim settlement ratio of 150.69% in FY 2019-20. A consistently high claims settlement ratio is a good parameter to understand how good the underwriting and claims process of a company is managed.

Importance of Selecting a High Claim Settlement Ratio Company:

Here are a few significant reasons for you to choose an insurance company with a high claim settlement ratio or CSR:

  • It helps in understanding how an insurance company handles the claims received from the policy nominees.
  • It helps in gauging the credibility of the insurance company and reaching a decision.
  • It helps in building confidence among the policy buyers during policy purchase due to the fact that a high claim settlement ratio implies more claims being settled by the insurance company.

Overall, higher the percentage of the settled claims, better are the chances that your general insurance policy claim will be accepted and settled by the insurance company. Know the high claim settlement ratio of insurers, Compare side by side and Buy General Insurance Policy from PolicyBachat.

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