Claim Settlement Ratio of Health Insurance Companies Explained | Is 98% CSR the Full Story?

0:00You always hear about claim settlement ratio.

0:02Some company publicize 95%, some 97, some 98.

0:08But do you really know how it is calculated?

0:11And is it same for the policy you are being sold?

0:14Hi, I am Kshitij, founder of nyvo insurance, and today we will deep dive into claim

0:19settlement ratio, how it is calculated, and if there is any better metric that you

0:24can see.

0:25So first, let me tell you how the claim settlement ratio is getting calculated, and

0:30what is the source of it.

0:31So you know in detail how someone tell you what is the claim settlement ratio of a

0:35particular company.

0:36Every company needs to report their public disclosures, which are available on their

0:42website.

0:42And these are reported to IRDAI as well.

0:45In these public disclosures, there are multiple kind of disclosures that company do,

0:50and they are segregated around different NLs.

0:53The two most important NLs we will talk about today is NL-37 and NL-47.

0:59NL-37, where most people calculate claim settlement ratio from, includes how many

1:03claims the company got that year, how many were outstanding claims from previous

1:07year, how many claims they settled this year, and how many outstanding claims will

1:11go to next year.

1:15Basically, these 4 to 5 numbers are given in this form for health policy of a

1:19company and you can get the claim settlement ratio from that by dividing how many

1:24claims they settled and how many claims they received.

1:28So, this gives the claim settlement ratio.

1:30But there is a big star mark on this claim settlement ratio, because it is not

1:37divided between retail policies and group policies.

1:47This is a combined data which includes both group policies and retail policies.

1:47Now, why does it matter?

1:48In group policies, generally there is no waiting period for pre-existing diseases.

1:53Also, while a corporate take a group policy, nobody has to disclose any kind of

1:58medical condition,

1:59versus while taking a retail policy, it becomes very important to disclose all

2:04conditions, and there are waiting periods in the policy.

2:07Group policy claims are generally passed.

2:09Many companies can achieve 100% claim settlement ratio.

2:13While for retail policy, as you may heard, the claims get rejected due to

2:17non-disclosures or other terms and conditions.

2:20So, if you go by NL-37 and take this data, a company doing high group business will

2:25have higher claim settlement ratio, while a company doing less group business will

2:30have lower claim settlement ratio.

2:34Because naturally, group business is higher claim settlement ratio overall.

2:38Now, let me tell you more important data that is hidden in NL-47.

2:43It gives you percentage of claim settled for all the products of the company, be it

2:48group, be it individual, and it gives you separately.

2:51So today, we have gone through this NL-47 to tell you about percentage of claim

2:56settled for for the top plans that you hear in the market.

3:00Today, I will discuss first six specific policies.

3:03So, we'll first talk about Niva Bupa ReAssure.

3:07This includes ReAssure, ReAssure 1.0, 2.0 and 3.0.

3:11The claim settlement ratio given in the NL-47 doc is 96.8%.

3:17Now, if I talk about Care and their flagship plan Care Supreme, the claim settlement

3:23ratio is 96%.

3:24Now coming to HDFC Optima Secure, the claim settlement ratio is 93%.

3:29Now coming to Star Comprehensive, here the claim settlement ratio declines and is

3:34around 90%.

3:35If I talk about Activ One plan, which includes all variants of Activ One, the claim

3:40settlement ratio given in this is 92%.

3:43One of the most shocking for me was going through ICICI Elevate plan.

3:47If I talk about this plan, the claim settlement ratio decreases a lot and is just

3:5475%.

3:54So, NL-47 provides you individual plan claim settlement ratio, which is amount of

4:00claims settled divided by total claims received for that particular policy.

4:05Look out for this and go for plans which is greater than 90% of claim settlement

4:10ratio.

4:10Now, you will ask me, how do you select a plan?

4:13So, there are three four things you should look for.

4:16The most important thing that you should look for is the policy features.

4:21Are there any hidden features in your policy that will lead to your claim not

4:25getting passed fully?

4:27Second, while claim settlement ratio is a good metric to start with, you should look

4:31for individual policy's retail claim settlement ratio as well, as well as you should

4:36look for complaint ratio for the company.

4:38Third, while buying a policy, the most important thing is doing all medical

4:43disclosure.

4:44Any non-disclosure with any of the company, be it high claim settlement ratio or low

4:49claim settlement ratio can lead to denial of your claim.

4:52So, remember that fact while buying a policy.

4:56A strong plan with high claim settlement, low complaints and full disclosure all

5:01will lead to your claim getting passed and you facing no problem during the time of

5:06hospitalization.

5:08At nyvo, our advisors provide you different comparisons of top plans and help you do

5:14full disclosure so that you face no problems at the time of claims.

5:18And that's how we also give claim support guarantee where we either get your claim

5:23passed or give your money back.

5:25For more such breakdowns, subscribe the channel and stay tuned.