Claim Settlement Ratio 2026: How to Actually Read IRDAI's Data Before Buying Health Insurance

By Nitish Bharadwaj · Published Jul 19, 2026 · 5 min

Health insurers routinely advertise a Claim Settlement Ratio above 90%, but IRDAI's FY 2024-25 Annual Report shows a very different metric — the Incurred Claims Ratio — ranging from 68.06% for standalone health insurers to 97.30% for public sector insurers. CSR measures how many claims get a decision; ICR measures how much of collected premium gets paid out in claims, and a low ICR often reflects a young, fast-growing portfolio rather than poor claims behaviour. This guide explains both metrics precisely, where to find IRDAI's real data, and how to actually use it before buying.

Every health insurer's website prominently displays a Claim Settlement Ratio — usually somewhere north of 90%, sometimes brushing 99%. It's the single most-quoted number in Indian health insurance marketing, and it's also the most misunderstood. IRDAI's own FY 2024-25 Annual Report tells a more layered story: claims did get settled at a high rate industry-wide, but a second, less-publicised metric — the Incurred Claims Ratio — shows figures as low as 68% for the very insurer category boasting the highest settlement percentages. Here's what each number actually measures, and how to use both before you buy.

What Claim Settlement Ratio (CSR) Actually Measures

Claim Settlement Ratio is a count, not a rupee figure. It measures what share of the claims an insurer received in a financial year were actually paid out, against the total number received. IRDAI's FY 2024-25 Annual Report puts the industry-wide health claims picture at roughly 87% settled, about 8% repudiated (rejected), and the remainder still pending a decision at year-end. Standalone health insurers — companies that sell only health cover, such as Star Health, Niva Bupa, and Care Health — reported a combined settlement ratio above 99%, reflecting how quickly this specialised segment now processes claims to a decision, whether that decision is approval or rejection.

The Metric That Actually Reveals More: Incurred Claims Ratio (ICR)

Incurred Claims Ratio answers a completely different question: for every ₹100 of premium an insurer collected in a year, how much did it pay out in claims? An ICR of 85% means the insurer paid ₹85 in claims for every ₹100 it collected, retaining ₹15 (before its own operating costs) as underwriting margin. Unlike CSR, ICR is a financial ratio — it gets confused with settlement behaviour, but a low ICR doesn't necessarily mean an insurer is difficult to claim from. It more often reflects a fast-growing book of new policyholders who haven't filed claims yet, or a younger customer base with fewer high-value hospitalisations so far.

Where to Actually Find This Data

IRDAI publishes both metrics, insurer-wise, in its Annual Report and the Handbook on Indian Insurance Statistics, both available on irdai.gov.in. The Annual Report for a given financial year is typically released several months after that year closes, so the FY 2024-25 report (covering April 2024 to March 2025) became available only in the second half of 2025. It's the only source reporting every registered insurer on an identical, audited basis — third-party comparison sites often repackage this same data against different reference years, which is why you'll see different percentages for the same insurer depending on where you look. When in doubt, check the year the source is actually citing. IRDAI's under-construction Bima Sugam marketplace is meant to eventually surface claims performance data like this directly at the point of purchase, rather than requiring buyers to dig through a separate Annual Report — though that piece of the platform isn't live yet.

How to Use This Data Sensibly Before Buying

• Pull the insurer's CSR and ICR for the last 3 years from IRDAI's own Annual Report, not a comparison website's summary table, and check the trend rather than one year in isolation
• Cross-check against complaints per 10,000 policies, also published by IRDAI — a high CSR alongside a high complaint volume suggests claims get settled, but not without friction
• Weigh standalone health insurers' near-100% settlement ratios against their comparatively lower ICR — the two numbers aren't contradictory, they're measuring different things, as the table above shows
• Confirm the insurer's network hospital list actually includes providers near you, since a strong CSR on paper doesn't help if your nearest quality hospital isn't cashless with that insurer
• Read a sample of policy wording for waiting periods and sub-limits — see our guide to why health insurance claims get rejected for the disclosure and documentation issues that cause rejections regardless of an insurer's overall ratio

What CSR and ICR Can't Tell You

Neither ratio tells you how long a claim took to settle, whether it was paid in full or short-settled against a room-rent sub-limit, or whether your specific pre-existing condition would even be covered post-waiting-period. Those depend on individual policy wording, not an insurer's aggregate numbers — which is why comparing a shortlist on claims record is only the first filter, not the final decision. If you're insuring a parent, our senior citizen health insurance guide covers age-specific underwriting quirks a claims ratio alone won't surface, and if you're switching insurers based on a better ratio, see what actually goes wrong during portability before you file the switch.

Bottom Line

CSR tells you how often an insurer reaches a decision on a claim; ICR tells you how much of the premium pool it pays back out. Neither number, read in isolation or for a single year, should be the deciding factor — but together, tracked over three to five years alongside complaint data and network hospital coverage, they give a far more honest picture than the single bold percentage every insurer puts on its homepage.