What is incurred claim ratio? How is it different from claim settlement ratio?
The incurred claim ratio (ICR) is a key metric for evaluating a health insurer's financial health and claim settlement efficiency.Summary
The incurred claim ratio (ICR) in health insurance represents the percentage of premium income an insurer pays out in claims. It's calculated by dividing net claims paid out by net premium collected, then multiplying by 100. A ratio over 100% suggests the insurer is operating at a loss and may increase premiums or reject more claims. Conversely, a ratio below 50% could indicate a poor claim settlement record or overly strict underwriting. An ideal ICR falls between 60-90%, signifying a good balance between claim settlement and financial stability. Policyholders can find ICR data on the Insurance Regulatory and Development Authority of India (IRDAI) website to inform their health plan choices. Understanding ICR helps assess an insurer's long-term sustainability and potential for smooth claim processing.
(Source：The Economic Times)