How to Calculate Claim Settlement Ratio in Health Insurance?

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Health insurance is an essential aspect of financial planning, as it provides economic support in times of medical emergencies. However, the real benefit of having health insurance lies in its claim settlement process. The claim settlement ratio is a crucial factor that helps policyholders assess the insurance provider’s credibility and reliability. It is critical to understand how to calculate the claim settlement ratio in health insurance to make informed decisions when choosing a health insurance provider.

What is the claim settlement ratio?

The claim settlement ratio (CSR) in health insurance is a metric that measures the percentage of health insurance claims settled by an insurance company over a given period. The calculation is the ratio of total health insurance claims settled by the insurance company to total claims received during the same period.

CSR is a critical indicator of the insurer’s efficiency in settling claims. A high CSR indicates that the insurer has a good track record of settling claims, which can reassure policyholders. On the other hand, a low CSR may indicate that the insurer is having difficulty settling claims, which can be concerning for policyholders.

IRDAI mandates that all insurance companies disclose their claim settlement ratio on their website and annual reports. IRDAI regularly conducts inspections and audits of insurance companies to ensure they follow fair practices while settling claims. The regulatory body also takes measures to educate and create awareness among policyholders about the importance of CSR and the need to choose a reliable insurance provider.

How to calculate the health insurance claim settlement ratio?


The formula to calculate the health insurance claim settlement ratio (CSR) is

CSR = (Total number of claims settled / Total number of claims received) x 100%

For example, if an insurance company receives 100 health insurance claims in a year and settles 90 of them, its claim settlement ratio would be:

CSR = (90 / 100) x 100% = 90%

Therefore, the claim settlement ratio of this insurance company for that particular year is 90%.

Suppose the same insurance company receives 450 claims in the subsequent year and settles 420 of them. Additionally, the insurer has 30 pending claims from the previous year. Considering this, the combined claim for this year is 480, and the claim settlement ratio will be:

[430 / (450+30)] x 100 = 89.58%

Why should you consider the claim settlement ratio?

Here are some reasons why you should consider the claim settlement ratio:

  • Trustworthiness: A high claim settlement ratio indicates that an insurer providing personal accident insurance is trustworthy and reliable. And if an insurance provider has a good track record of settling claims, it can give you peace of mind knowing that they will be there for you when you need them the most.
  • Customer satisfaction: A good claim settlement ratio is often an indicator of high customer satisfaction. When an insurance provider can settle claims quickly and fairly, customers are more likely to be happy with their overall experience.
  • Financial stability: A high claim settlement ratio can also indicate the financial stability of an insurance company. It suggests that the company has the resources to pay claims and is managing its finances responsibly.
  • Transparency: This ratio can help you assess the insurance company’s transparency. By reviewing the claim settlement ratio, you gain a better understanding of how the company handles claims and how they communicate with its customers.


Health insurance is an important part of our lives, and we must understand how it works. The claim settlement ratio is one of the most important parameters to consider when evaluating an insurance company. You can find this information on the website of your preferred insurer or the website of a health insurance aggregator.

Also Read: Which Factors Influence Your Life Insurance Coverage?

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