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Claim Settlement Ratio: Importance, Process & How to Calculate?

Posted On : 27 September 2022, 1 Years Ago. Health-Insurance
claim settlement ratio

When purchasing an insurance policy, the ultimate goal is to protect oneself against unexpected losses or damages. However, what happens when a policyholder files a claim? It is at this point that the importance of the Claim Settlement Ratio (CSR) comes into play. CSR is a metric used by insurance companies to measure the percentage of claims that have been settled against the total number of claims received in a particular period. In other words, it is a measure of the company's ability to honour its commitment to policyholders. In this article, we will delve into the significance of CSR, the process involved in settling claims, and how to calculate CSR. So whether you're an insurance policyholder or a potential buyer, understanding CSR is crucial in making informed decisions about your insurance needs.

 

Claim settlement ratio or CSR is the percentage of claims that an insurance company settles during a year out of its total claims. The CSR of an insurance provider indicates the company's credibility. The higher the CSR, the more reliable the insurance provider is. You can check the claim settlement ratio of varied insurance companies on the official site of IRDAI (Insurance Regulatory and Development Authority of India).

 

The Importance of Claim Settlement Ratio: Why Does It Matter?

In the first place, CSR helps assure the financial security of your entire family. The primary goal of purchasing life insurance is to provide total financial protection against any unanticipated events. Nevertheless, this purpose will be completely defeated if the insurance company fails to honour your claim.

 

Better Chance of Claim Settlement: If the insurance provider honours the majority of claims, your family has a better chance of having a clear, painless, and straightforward claim process. As a result, you may be comfortable that your loved ones will be able to obtain the sum promised.

 

Reliability: Unlikely to Default: Second, the CSR of an insurance company is indicative of its reliability. The claim settlement ratio process indicates an insurance company's potential to pay the sum insured to the policyholder or the nominee.

 

Security of the family: Insurance companies with high CSR over a considerable amount of time are unlikely to default on their commitment to compensation. In other words, understanding the CSR of a company should be your first consideration if you are considering buying a health insurance plan.

 

What is the Health Insurance Claim Settlement Process?

Are you curious about how to get a hassle-free cashless insurance claim? Look no further! Here are the five steps you need to know: 

 

  • Step 1: Find out the network hospitals listed in your policy to receive cashless treatment without any hassle. 

  • Step 2: In the event of emergency hospitalisation, inform your insurer within 24 hours. For planned hospitalisation, make sure to notify your insurer 48 hours in advance. 

  • Step 3: Don't forget to carry the medical identity card provided by your insurer while getting admitted to a network hospital. 

  • Step 4: If you choose to get treatment at an out-of-network hospital, simply fill out the required form and submit the necessary documents. 

  • Step 5: Once your claim is approved, sit back and relax! The insurance company will take care of the treatment cost.

     

Analysing Claim Settlement Ratio

You can get types of health insurances, like Reassure, Health Companion, Health Premia, Heartbeat and Goactive. You can also get a discount of 7.5% if you buy any of then online.  And the most important thing is they help you settle cashless claims within 30 mins.  The procedure for analysing the claim settlement ratio is as follows:

 

  • CSR higher than 80% is considered good. Companies with over 90% CSR will offer great value products for sure.
  • Do not need to delve into the details of a company's outstanding claims because they may be legitimate.
  • Also, consider the average claim settlement time that the company takes, as this indicates the process efficiency of an insurance company. It is excellent if a company takes less than 20 days to settle a claim, and anything less than 30 days is also considered exemplary.

 

Calculating Claim Settlement Ratio

Now that you have got an idea about the claim settlement ratio process,  know how to calculate claim settlement ratio. You can calculate claim settlement ratio using the following formula:

 

CSR or Claim Settlement Ratio= Total number of claims in a year x 100

 

For instance, if Company-A has settled 8,500 claims out of 10,000 claims for the year 2020-2021, the company's CSR will be 85% (8,500/10,000 x100). 

 

Keep in mind that this ratio not only tells about the aggregate of health insurance claims, but all types of insurances that a insurance company provides.

 

The Bottom Line

An insurance company's claim settlement ratio is a reliable indicator of the company's ability to honour claims and when it comes to the health of the family everyone seeks the best. By checking the claim settlement ratio of different insurance companies, you can predict the risk involved. However, this ratio can easily be skewed based on varied conditions. Therefore, research well when searching for the best insurance provider. The more the health insurance claims settlement ratio, the better is the company. And choosing a health insurance plan from that company is always wise to get the full benefits of your insurance plan without any hassle.

 

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Secure your health with comprehensive insurance plans from Nivabupa

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I authorize Niva Bupa to call me. This will override your existing registry in DNCR. I want to get my quote and policy details on WhatsApp.
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