What Is Claim Settlement Ratio and Why Does It Matter for Corporate Insurance?

Claim settlement ratio is among the most-cited but least-understood metrics in health insurance procurement. Here's what it actually measures, what the FY 2024-25 numbers look like, and how to use it correctly when buying corporate cover.

The Definition

Claim settlement ratio (CSR) is the percentage of claims an insurer settled out of the total claims received during a financial year:

CSR = (Total claims settled ÷ Total claims received) × 100

The Insurance Regulatory and Development Authority of India (IRDAI) publishes CSR data annually in its Annual Report and through periodic claim settlement disclosures. The latest disclosure released in February 2026 covers FY 2024-25.

What "Settled" Actually Means

IRDAI's CSR data focuses on claims settled within 3 months of receipt. A claim is considered settled when the insurer has either:

• Paid the claim amount in full or in part as per policy terms, or
• Formally rejected the claim with documented reasons

Pending claims and partial repudiations affect the ratio. The 3-month window is significant because it reflects operational efficiency, not just willingness to pay.

FY 2024-25 Claim Settlement Ratios

Per IRDAI's February 2026 disclosure, the following insurers' performance for FY 2024-25 stands out for corporate health insurance buyers:

• Acko General Insurance: 99.98%
• Reliance General Insurance: 99.32%
• HDFC ERGO General Insurance: 98.85%
• ICICI Lombard General Insurance: 98.45%
• Star Health and Allied Insurance: 99.06%
• Aditya Birla Health Insurance: 100%
• Niva Bupa Health Insurance: 100%
• Galaxy Health Insurance: 100%
• Narayana Health Insurance: 100%
• New India Assurance (public sector): 91.75%
• National Insurance (public sector): 91.79%
• United India Insurance (public sector): 95.26%

The overall settlement ratio for standalone health insurers in FY 2024-25 was 99.93%, reflecting significant operational maturity in the segment.

CSR Is Necessary but Not Sufficient

A high CSR is important but doesn't tell the full story. Three other metrics matter:

• Incurred Claim Ratio (ICR). The percentage of premium income paid out as claims. The healthy range is 70 to 90%. Below 70% suggests aggressive underwriting or claim restriction; above 90% suggests potential pricing pressure on future premiums.
• Median claim settlement time. How quickly the insurer settles in practice. The IRDAI Master Circular of May 2024 mandates cashless pre-authorisation within one hour and discharge approval within three hours. Reimbursement claims must be settled within 30 days.
• Repudiation rate and reasons. The percentage of claims rejected and the typical reasons. High repudiation on grounds of non-disclosure may indicate aggressive scrutiny at claim stage.

How to Use CSR When Buying Corporate Insurance

• Use a 3-year trend, not a single year. A single-year spike or dip may reflect one-off factors. Consistent 95%+ over 3 years signals operational stability.
• Compare like-for-like. Standalone health insurers and general insurers (which sell multiple product lines) compute CSR differently. Compare within the same category.
• Combine with ICR. A 99% CSR with a 60% ICR suggests claims may be settled at restricted amounts. A 99% CSR with an 85% ICR suggests genuine settlement.
• Check the TPA. The insurer's CSR reflects insurer performance, but day-to-day claim experience depends on the TPA. Ask which TPA will handle your account.
• Verify by reference. Speak to existing customers about real claim experiences, not just published metrics.

What's a "Good" CSR for Corporate Health Insurance?

Industry consensus places the threshold at 95%, with leading insurers consistently above 98%. Anything below 90% should prompt deeper questions about why. For corporate buyers, anything below 95% over a 3-year trend warrants caution, particularly for plans with significant claim frequency expected (older workforces, parent cover, high-utilisation industries).

Frequently Asked Questions

What is a good claim settlement ratio for health insurance in India?

Above 95% is the industry expectation; leading standalone health insurers reported 98 to 100% in FY 2024-25.

Is claim settlement ratio the same as incurred claim ratio?

No. CSR is the percentage of claims settled. ICR is the percentage of premium income paid out as claims. Both metrics serve different purposes in evaluating an insurer.

Where can I find the official claim settlement ratio of insurers?

IRDAI publishes CSR data annually in its Annual Report and through periodic disclosures, available on irdai.gov.in. Insurer websites and aggregators also publish this data.