Health insurance companies in India often tout high claim settlement ratios, indicating a smooth claims process for policyholders. However, these ratios may not tell the whole story. Settlement ratios can be misleading as they don’t reveal the actual payout amount, processing time, document requirements, or deductions made.
The simplicity of the claim settlement ratio masks important details. A settled claim, whether partially or fully paid, is counted the same way. Additionally, claims resolved quickly and those that linger for weeks or even months are treated equally in the ratio calculation.
Shilpa Arora, COO of Insurance Samadhan, emphasized that the ratio only reflects the number of processed claims, not their fairness or completeness. Grievances often arise from deductions, delays, and repetitive document requests, which are not reflected in the published settlement ratio data.
The Insurance Regulatory and Development Authority of India (IRDAI) has raised concerns about misleading advertising practices related to claim settlement ratios. IRDAI has urged insurers to adopt a standardized formula that includes various claim categories to provide a more accurate representation of their performance.
Mahavir Chopra from beshak.org highlighted the challenges of interpreting claim settlement ratios, especially when combining group and retail policies. He suggested focusing on practical metrics like claims settled in 30 days, complaint ratios, and governance standards when evaluating insurers.
Ultimately, the claim settlement ratio should be viewed as one of many indicators of reliability in health insurance. More detailed reporting and standardized data are needed to enhance the transparency and usefulness of these metrics for policyholders.