ICR vs Claim Settlement Ratio: Which Is a Better Indicator for Buying Health Insurance?

10 min read Posted on 17july 2025

In India, picking the right health insurance plan is more complicated than looking at the costs and perks. One of the most important steps is to determine how reliable the insurance company is at paying claims. In this case, the ICR and the Claim Settlement Ratio show how well an insurance company performs. In the health business, the Incurred Claims Ratio (ICR) is going up from 88.43% in 2019-20 to 93.80% in 2020-21.

Comparison tools for health insurance measurements assist consumers in assessing an insurer's efficiency, financial stability, and customer trust. But which one should you prioritise — ICR vs claim settlement ratio? Let's take a closer look at these two measures and see how they affect your insurance choice.

What Is the Claim Settlement Ratio (CSR)?

The Claim Settlement Ratio (CSR) shows what portion of all claims an insurance company settles during a given fiscal year. A higher CSR means the insurance company is more likely to pay customers' claims.

Formula: CSR = (Total Claims Settled / Total Claims Received) × 100

Example: If an insurer settles 9,800 out of 10,000 claims annually, the CSR will be 98%.

Because of this, CSR is a good way to measure an insurance company's reliability.

What Is the ICR Meaning in Insurance?

Another important metric is the Incurred Claim Ratio (ICR), which shows how much insurance premiums are paid out in claims.

Formula: ICR = (Net Claims Incurred / Net Premium Collected) × 100

Example: If an insurer collects ₹100 crore in premiums and pays ₹85 crore in claims, the ICR would be 85%.

You can determine whether the insurer is charging too much, turning down claims, or running sustainably by understanding the meaning of insurance.

ICR vs Claim Settlement Ratio: A Comparative Analysis

When comparing ICR vs Claim Settlement Ratio, it's important to understand that these metrics reveal different insights:

• CSR (Claim Settlement Ratio): Reflects how many claims are approved and settled — useful to judge reliability.
• ICR (Incurred Claim Ratio): Indicates the financial health of the insurer — how much they pay out compared to what they collect.

ICR vs CSR in Health Insurance Metrics

While both are important insurance performance indicators, they serve different purposes in a health insurance metrics comparison.

Why Does the Incurred Claim Ratio Matter?

Knowledge of ICR's meaning in insurance gives you a better idea of how ethical and responsible the insurance company is with money and screening.

Advantages of Balanced ICR

• It shows that the insurance company pays claims fairly without losing money.
• Suggests how much the premiums should be.
• Shows dedication to clients and long-term business success.

Limitations

• If the ICR is over 100%, the company might be losing money.
• High rejection rates or high fees are to blame for an ICR of less than 50%.
• It does not show the real number of claims paid.

Fact: The IRDAI says that an ICR above 100% for more than one year could cause rising premiums or operating problems.

Tip: Always use a healthy ICR for health insurance metrics comparison, which is between 75% and 90%.

Why Claim Settlement Ratio Matters

Knowing why the Claim Settlement Ratio is important can help you determine how reliable an insurance company is at paying claims.

Advantages of a High CSR

• This proves that the insurance company pays out a lot of claims.
• Offers good customer service and a lower chance of claim denial.
• Encourages first-time customers to trust the company.

Limitations

• Doesn't take into account partial claim payouts or delays in processing.
• Can't differentiate between types of insurance (health, auto, life, etc.).
• May be misleading if not compared to the number and value of claims.

DID YOU KNOW? Insurance companies with good CSR scores have still received customer complaints about delayed or partial claim settlements.

CSR is a great way to see how responsive an insurance company is, but it shouldn't be looked at alone.

Common Buyer Mistakes While Evaluating ICR and CSR

Below are common mistakes buyers make when comparing these metrics:

1. Trusting CSR Alone: A high CSR doesn't reveal issues with claim delays or underpayment.
2. Overestimating a High ICR: A very high ICR could be due to high hospital tie-ups or low policy sales.
3. Ignoring Insurance Type: CSR for life insurance is usually higher than for health — comparing without context is misleading.
4. No Claim Ratio Health Policy Review: Always check claim ratios when evaluating a health plan.
5. Not Reviewing Trends: ICR and CSR can vary significantly over three years; trend analysis is important.

If you make these mistakes, you might pick an insurance company that looks good on paper but underperforms in reality.

Best Practice: Use Both ICR and CSR Together

Knowing that they should work together is the key to understanding ICR vs. Claim Settlement Ratio:

• CSR > 95% + ICR 75–90%: Ideal
• CSR > 95% + ICR > 100%: Financial caution
• CSR > 95% + ICR < 50%: Might mean low claims paid or overpriced premiums
• CSR < 90% + ICR > 85%: Indicates inconsistent claim settlement practices

This combined view gives a truer picture of how the insurance company performed in the real world.

Observation: Choose Balanced Claim Ratio with New India Assurance

People who want a balanced claim ratio health policy should choose New India Assurance because it combines CSR and ICR best.

How RenewBuy Makes It Easy to Compare CSR and ICR

RenewBuy has a platform that puts the user first and gives buyers real-time data on insurance performance indicators that can help them make better choices.

• Compare Health Insurance Metrics Easily You can view insurer-specific data on ICR vs claim settlement ratio with RenewBuy, which is regularly updated using the most recent IRDAI figures to ensure accuracy and relevance.
• Graphical Analysis: Interactive graphs show CSR and ICR trends over the last three years, helping in visual comparison.
• POSP Advisor Assistance: Expert POSP advisors offer personalised guidance, explain insurance metrics, and help you select the right policy.
• Fully Digital Process: From comparison to policy issuance, everything is digital and paperless. Policies are issued instantly.
• End-to-End Claims Support: RenewBuy assists with documentation, claim filing, follow-ups, and advocacy throughout the claim process.

Real-Life Scenario: Anjali’s Decision to Use RenewBuy

Anjali, a working woman from Hyderabad who is 34 years old, wants to buy a family floater plan. These are her top choices:

• Insurer A: CSR = 98%, ICR = 88%
• Insurer B: CSR = 99.2%, ICR = 46%

While Insurer B has a slightly higher CSR, its low ICR could mean selective approvals or higher premiums; she knows this thanks to RenewBuy's comparison tools and POSP help. She goes with Insurer A because it strikes a better mix of dependability and financial commitment.

Conclusion

There is no clear winner in the ICR vs. claim settlement ratio debate. Instead, the best way to buy health insurance is to use both of these tools to compare various health insurance measures and make an informed choice.

ICR tells you about an insurer's financial honesty and how fairly they handle premiums versus claims.

CSR tells you about how trustworthy and reliable an insurer is when it comes to paying claims.

By using RenewBuy, you can get to a site where you can see, compare, and get advice from experts all in one place. Knowing and using these key measures will help you choose a health insurance plan that will really protect you when you need it the most.

You can view insurer-specific data on ICR vs claim settlement ratio with RenewBuy, which is regularly updated using the most recent IRDAI figures to ensure accuracy and relevance.

Disclaimer: The content published in this article is intended solely for the readers' informational purposes and should not be relied upon for personal, medical, legal, or financial decisions. It is advisable to seek advice from a qualified professional regarding specific concerns. The details provided regarding the plan are for reference purposes only. Please visit the insurer’s website for the latest updates on the plan. The company does not guarantee suitability, reliability, timeliness, or accuracy of the information, services, or any other aspects mentioned in this regard for any purpose. We do not endorse any insurance company or insurance product provided by any insurer.