What is the Meaning of ICR and CSR in Health Insurance?

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What is the Claim Settlement Ratio in Health Insurance?


CSR, also known as Claim Settlement Ratio in health insurance, is an important metric that helps us know the number of claims settled to the number of claims received by the health insurance company.


Claim Settlement Ratio = (Total No. of Claims Settled / Total No. of Claims Received) x 100


Let’s better understand with the help of an example:


Suppose, out of 100 claims, company A has settled a total of 95 claims in the given fiscal year. Hence, the health insurance company's claim settlement ratio is 95%.


What is the Incurred Claim Ratio in Health Insurance?


ICR or Incurred Claim Ratio in health insurance is the total claim amount paid by the insurance company in comparison to the total health insurance premium collected in a financial year.


Incurred Claim Ratio = (Total Value of Claims Settled / Total Value of Premiums Collected) x 100


The example will help you better understand ICR:


Suppose Company A collects Rs. 120 crore in premiums and pays Rs. 90 crore in claims, then the incurred claim ratio of the company will be around 75%. The remaining Rs.30 crore will be considered as profit for the insurance company.


Difference between ICR and CSR in health insurance


Here is the difference between the Claim Settlement Ratio and the Incurred Claim Ratio:














































Parameter



Incurred Claim Ratio (ICR)



Claim Settlement Ratio (CSR)



Authority Publishing the Data



It is published annually by IRDAI in its official reports.



It is published on the official websites of health insurance companies.



Insurance Coverage Scope



It is applicable only to health insurance claims.



It is not only specific to health insurance but applicable to all insurance products.



Percentage Range



80%-100 % ICR is considered ideal.



95% or above of CSR is considered ideal.



Speed of claim processing



It helps indicate if an insurer is settling the claims on time.



It does not provide visibility into the time taken to settle claims.



Indicator of Financial Stability



Considered a stronger indicator of an insurer’s financial sustainability.



Considered a weaker indicator when assessing financial health.



Influence on Future Premiums



A high or volatile ICR may result in future premium increases.



CSR has no direct impact on premium pricing.



Usefulness for Policy Evaluation



It is useful for assessing the long‑term reliability of a health insurer.



It helps in understanding the insurer’s claim approval behaviour.



Final Thoughts


Understanding the meaning and differences between the Claim Settlement Ratio and the Incurred Claim Ratio can help individuals make a wise decision while purchasing a health insurance policy.