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INCURRED CLAIMS RATIO lower for Big companies as per IRDAI

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02 Dec, 2022 by  Shantanu

Hello Beshak team,


I had checked the Claims ratio as per yearly IRDAI report 20-2021. According to this report,the claims ratio of Big Health Insurance companies is very low:


Aditya Birla -50%

Care - 55%

Max Bupa -56%

ICICI lombard -78%

HDFC ergo -73%


While those of Public sector insurance companies is very good.

National Insurance -103%

New India -100%

Oriental -104%

United India - 104%


My question is

1) Is this data and understanding accurate? and how much should we base our decision of buying on this reports?

2) Is it wise to chose Public sector companies over private players as Claim Settlement is THE MOST IMPORTANT Factor while taking insurance?

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1 Answer

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03 Dec, 2022
MBA | 5 years experience
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Dear Shantanu,


ICR means out of ₹100/- earned as premium, how much are companies paying towards claims. While one would think higher the better, on the flip side the it could also mean that insurer is making losses like incase of PSUs and therefore in order to cover up the losses they would increase their premiums significantly and at faster pace. A case in point - many PSU insurer in recent have shut down their group insurance products that were offered at a very low price via bank branches. These products have now been re-launched with almost similar pricing to a retail product.


A higher ICR also means that the insurer might also be trying to garner market share (to keep investors happy) and hence is going easy with claim approval. One can find this by comparing ICR of last 2-4 yrs.


ICR also includes costs towards branches, manpower, infra etc.


In my ranking frankly I do not even include the ICR. What is more important to me is features, benefits, exclusions and my ability to understand all the three and customer support. Even before a child is born "claim settlement" is infused in our blood stream, I think we need to come over it and have more holistic approach.

This is my opinion someone with better understanding and knowledge may have a different opinion.


While you are going through ICR to probably shortlist a product... Do checkout the Beshak Ranking which are based on multiple factors like pricing, features, customer service etc.


Have a good day.


Regards

Rohit Dhingra

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