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How Is The Claim Settlement Ratio Calculated In Health Insurance?

Updated On Aug 25, 2021

There are a plethora of health insurance providers and policies in the insurance market which gives the customers a wide variety of choice to choose from. When buying a health insurance cover from an insurance provider you must consider several factors and conduct ample amounts of research on the same. When choosing an insurer you must consider the reviews, claim settlement ratio, network hospital, other benefits and features of the company. You must analyse your requirements and demands from a health insurance cover and accordingly invest in a health insurance plan. 

Claim settlement ratio is one of the prominent factors that must be considered when choosing an insurance provider for a health insurance policy. You can compare the claim settlement ratios of the top health insurance companies and choose the one with the highest ratio. You must also make sure that the company has good ratings and reviews along with the comprehensive coverage provided. Keeping in mind your financial budget, you can invest in a health insurance policy for yourself and your loved ones. 

How Is The Claim Settlement Ratio Calculated In Health Insurance?

About Claim Settlement Ratio of A Health Insurance Company 

The whole purpose of having a health insurance policy is to provide monetary support to the customers at the time of medical emergency. Therefore, claim settlement plays a crucial role, as when not settled on time or with efficiency the insurance policy has no point to serve to its policyholder. A claim settlement ratio determines the ability of the health insurance company to settle claims of the customers on time with not much effort. A claim settlement ratio is the ratio  of claims paid or settled by the company out of the total claim requests received to the company in a financial year. The company with the highest claim settlement ratio is the one with the best claim settling record in a financial year. 

How Is The Claim Settlement Ratio of A Health Insurance Firm Calculated? 

The claim settlement ratio of a health insurance company is calculated annually considering the total claims received, total claims paid, and outstanding claims at the start of the year in a financial tenure. Following formula is used by the companies to calculate their claim settlement ratio for a financial year: 

Claim settlement ratio = (total claims settles) / (total claims received + outstanding claims at the start of a year) 

Companies like IFFCO Tokio health insurance, Care health insurance, Magma HDI health insurance, Oriental health insurance, etc. had the highest claim settlement ratio in the FY 2019-20. The claim settlement ratio when multiplied by 100 gives the value in percentage. You can find the list of claim settlement ratios of all the leading health insurance firms over the internet.

Benefits of Considering Claim Settlement Ratio of The Insurance Company 

Let us look at some of the advantages of considering the claim settlement ratio of a company before investing in a health insurance policy offered by the company: 

  • It reflects the history of claim settling abilities of the company.
  • It gives the customers a sense of confidence when choosing a health insurance provider, as claim settlement is the most important step when availing a health insurance policy. 
  • It narrows down the options while choosing an insurance provider and makes the comparing procedure less confusing for you when researching the health insurance policies. 
  • It shows the efficiency and responsiveness of the company towards the customers and helps in understanding the company better. 

Consistency of Claim Settlement Ratios 

The claim settlement ratio reflects the ability of the company to deal with the claim settlement process of a policyholder and therefore, when conducting your research you must look for the past five years claim settlement ratio of the company you plan to buy your health insurance cover from. The company you are considering to buy a health insurance plan from, must be consistent in its performance to provide claims to the customers on time with no hassles. 


You must consider the claim settlement ratio of a company before purchasing a health insurance policy from them. You can look up the claim settlement ratios online on various websites or the official website of the insurance provider. 

Must Read: Best Health Insurance Companies In 2021 Based On Claim Settlement Ratio

Companies With Best Health Insurance Claim Settlement Ratio

Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.

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