Despite the market brimming with health insurance companies, finding the right plan that suits your needs, as well as your budget, may not be as easy as it may seem. There is so much that you need to think about, the coverage, benefits, premiums, etc are just a few things that you need to think about before you make a decision.
While these aspects are vital, when it comes to health insurance choosing the health insurance company is probably the most crucial thing of all. When you choose the right company, almost everything falls into place. But when there are over 2 dozen insurance companies, how to pick the best one?
There are a number of components that go into deciding which is the best health insurance company. But the most prominent aspect remains claim settlement. After all, you invest in an insurance plan, with the aim that in time of your need, your insurer will provide you with suitable and speedy financial aid. Thus, when you are sifting through different companies, you must pay attention to the incurred claim ratio. The ICR can be instrumental in choosing the right company. Read on to understand what incurred claim ratio is and what makes it so important.
Incurred Claim Ratio
The total cost of all claims paid by a company divided by the total amount of premiums collected over the same period is known as the "incurred claim ratio." Incurred claims ratio demonstrates a company's capacity to pay claims. If a company's ICR is greater than 100%, the amount of cash given away as claimed is greater than the amount received as a premium. In such circumstances, the company may struggle to remain in business. It may end up rejecting specific dubious claims, raising the rate to manage claims favourably, or changing its product entirely.
If an organisation's ICR is between 50% to 100%, it means that it has received more money in premium payments than it has paid out in claims. In these situations, the business generates money, demonstrating that it has not only created a high-quality product but has also been successful in marketing it to clients and educating them on when and how to make claims.
If an organisation's ICR is less than 50%, the business is either barely issuing claims or is making comparatively significant profits. The fact that the industry is making big gains is not entirely a positive thing, either, as all health insurance providers ought to provide services that genuinely pay claims within the appropriate ranges. When claims are minimal, clients who buy these products realise that the health coverage is expensive and has excessive exclusions. They may thus, switch to a better or more effective outcome. An ideal ICR, therefore, lies between 75% to 90%.
Health insurance incurred claim ratio of health insurance companies in 2021
The following table shows the latest incurred claim ratio of general and standalone health insurance companies for the financial year 2020-21 and 2021-22.
| Name of the Health Insurance Company | Incurred Claim Ratio 2020-21 | Incurred Claim Ratio 2021-22 |
|---|---|---|
Standalone Health Insurance Companies
| Name of the Health Insurance Company | Incurred Claim Ratio 2020-21 | Incurred Claim Ratio 2021-22 |
|---|---|---|
The increase in the cost of healthcare treatments seems to have taken an all-time high jump post covid. The scare in the air after the latest covid-variant BF.7, is just another reminder that taking care of one’s health is of paramount importance. While avoiding a trip to the hospital is not always possible, being prepared for a medical emergency is. And the easiest and sure-shot solution to not dig into your savings is by investing in a good health insurance plan from a reliable and trustworthy health insurance company that maintains a decent incurred claim ratio.
Recommended Link: Why Health Claims Increased Over 257% in 2021?
