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Claim Settlement Ratio in Group Health Insurance


claim settlement - insurance claim procedure

Group health insurance claim is the claim raised by the members of the group health insurance policy. The claim under group health insurance policy can be raised on a cashless basis or reimbursement basis. In case of cashless claim settlement, the insurance company would directly settle the claim with the hospital whereas in case of reimbursement the customer would pay the hospital bill first and then claim it from the insurance company. The group health insurance claim form can be found online.

A group health insurance policy is a type of health insurance policy that is offered to a group of members under a single policy. The policy is usually taken by the employer to provide health insurance coverage to his/her employees. The group health insurance claim form contains the details to process the claim on reimbursement basis. The claim form usually contains the details of the group health insurance policy, hospital admission details of the patient and other details.

Once the claim form is submitted to the insurance company in addition to the original bills and reports the insurance company will process the claim from their end. The claim would be processed and payment of claim amount would be done to the customer’s account within the stipulated time period.

The claim settlement process would be the same for the reimbursement claims as well cashless claims but the difference would be the payment of claim amount by insurance company directly to the insurance company in case of cashless claim settlement facility. Claim settlement would be calculated as a ratio to rank the insurance companies and find out the best insurance company.

Claim Settlement ratio: Claim settlement ratio is the ratio of the number of claims settled by the insurance company to the number of claims received by the insurance company. The group health insurance claim settlement ratio is the ratio of the group health insurance claims received by the insurance company to the claims settled by the insurance company.

The group health insurance claim settlement ratio can range anywhere between 97-98% for the insurance companies. Higher the claim settlement ratio, higher would be the chance of getting the claim settled. But it is also important to check the claim amount paid by the insurance company to the claim amount made by their customers in case of group health insurance policy.

Claim Settlement Ratio = Claims settled/ Claims received

What does it mean for the customer?

Group health insurance claim settlement ratio is one of the gauging factors when deciding the insurance company to opt for the group health insurance policy. The higher claim settlement ratio in group health insurance policies reflects the high chance of claims getting settled.

It is also important to understand that there would be certain claims which would be carried forward to the next financial year and may reflect in the claim settlement ratio of that year. The group health insurance claim settlement ratio can be obtained from the website of the insurance company.

It is an important factor that is to be considered by the customer at the time of taking the group health insurance policy. The group health insurance claim settlement ratio as mentioned above is the ratio of the number of group health insurance claims settled by the insurance company to the number of claims received by the insurance company.

Consistent CSR: It is very important for the insurance company to have a consistent Claim settlement ratio for at least 3 years. Customers should pay attention to the group health insurance claim settlement ratio of the past 3 years at least to understand the consistency which is a major factor in deciding the insurance company. The more consistent the CSR, the higher the chances of the claim getting settled.

FAQ on Claim Settlement Ratio:

i) When can an insurance company reject the claim?

An insurance company can reject the claim in any of the below cases:-

  • If there is a fraud claim reported by the customer where the facts are distorted willingly to obtain the claim. Fraud claims would include inflating the claim amount, claiming without actual treatment and claiming for some other illness other than that got treated etc.
  • If the material facts provided by the insured customer at the time of taking the claim are found to be false. Not providing material facts would lead to rejection of claim by the insurance company.
  • If the treatment or hospitalization is not intimated to the insurance company within a specified time period, it may lead to rejection of claim by the insurance company.

ii) What does high CSR indicate?

High claim settlement ratio in group health insurance indicates the higher chances of claims getting settled. The group health insurance claim settlement ratio increases with the increase in the number of claims settled to the total claims received by the insurance company. High CSR also would act as the USP for the insurance company and the attractive point for the customer.

iii) What does low CSR indicate?

Low claim settlement ratio indicates fewer chances of claims getting settled. Customers should look out for the group health insurance claim settlement ratio and check if the ratio is low or high. Insurance companies having low claim settlement ratio should be avoided as those companies would not settle the group health insurance claims adequately.

v) Reasons to check CSR:

There are certain reasons to check the group health insurance claim settlement ratio which is mentioned below:-

  • Claim settlement ratio determines the trustworthiness of the insurance company. It can be said that an insurance company with higher CSR leads to high trustworthiness.
  • Higher claim settlement ratio for the past 3 years should be taken into consideration before finalizing the insurance company for taking the group health insurance policy as the average claim settlement ratio should also be higher.

    If the claim settlement ratio for the past 3 years at least is not higher, then it is advisable to avoid that insurance company as it would not honor the claims raised by the members of the group health insurance policy.

Susheel Agarwal

Namaste. I'm Abhinay Nedunuru, a Fellow of the Insurance Institute of India with a passion to make insurance simple and crisp. I write mostly on insurance and investment. I have a passion for teaching and training in particular to insurance. I'm currently doing my PhD from IIM in Marketing Management.