Health insurance claim ratio stood at 101% for the year 2015 as published in the annual report of the Insurance Regulatory and Development Authority of India (IRDAI). The ‘claims settlement ratio’ is the number of claims rejected with respect to claims received. The ‘claims repudiated ratio’ is the number of claims refused with respect to claims received. The ‘claims pending ratio’ is the number of claims pending (not settled, nor rejected) with respect to claims received.
For the year 2015, the claim ratio for health insurance industry rose from 97% (2014) to 101%. This trend indicates that general insurance companies are paying out more money in claims than the premium income.
The main reason cited for this is rising cost of healthcare and treatment. Healthcare costs are rising 12 – 18% per annum. There are no fixed rates for any operation, treatment procedure or nursing care or a particular hospital, a policyholder can go. Insurance company has to settle all claims irrespective of the hospital chosen, leading to higher claims payable.