20 private Indian insurers struggle with claim payouts

Only four insurers achieved a claim-paid ratio exceeding 90% in terms of the number of claims processed.

In 2023, 20 private health insurers in India paid less than 80% of the total amount claimed by insured patients, according to the Insurance Brokers Association of India (IBAI), as reported by the Indian Express.

This meant that if a policyholder claimed ₹1 lakh for hospital expenses, the insurer covered less than ₹80,000, leaving the policyholder to pay the rest.

Amongst public sector insurers, New India Assurance recorded the highest claim payout ratio, disbursing 98.74% of the claimed amount, followed by Oriental Insurance at 97.35%. 

In contrast, private insurers like HDFC Ergo and ICICI Lombard reported significantly lower payout ratios of 71.35% and 63.98%, respectively.

IBAI data also revealed that only four insurers, including New India Assurance (95.04%), Aditya Birla Health (94.52%), Iffco Tokio (91.70%), and Bajaj Allianz (90.29%), achieved a claim paid ratio exceeding 90% in terms of the number of claims processed. 

However, 10 insurers, predominantly private players, had a claim-paid ratio below 80%.

The report highlighted that claims repudiation ratios, which measure the percentage of claims denied, ranged between 5% and 18% for 23 insurers, mostly from the private sector. 

In the fiscal year 2022 to 2023, general and health insurers settled 2.36 crore health insurance claims, paying out ₹70,930 crore, according to the Insurance Regulatory and Development Authority of India (IRDAI). 

The average payout per claim was ₹30,087. Of the total claims settled, 56% were processed through cashless mechanisms, whilst 42% were reimbursed.