Decoding Incurred Claim Ratio (ICR): The Key Metric For Choosing The Best Health Insurance
Decoding Incurred Claim Ratio (ICR): The Key Metric For Choosing The Best Health Insurance

Decoding Incurred Claim Ratio (ICR): The Key Metric For Choosing The Best Health Insurance

Health insurance plans are now a physical and financial must-have. A big part of this success is due to rising medical inflation, a big problem because healthcare costs are increasing. This level of fame has brought in several new health insurers, but it has also caused a lot of confusion among people who want to buy insurance.

A less-than-perfect Claim Settlement Ratio (CSR) or an easy-to-use claim settlement process is an extensive marketing trick that makes choosing a health insurance company hard. Once you get health insurance, you should make a long-term financial pledge to save money when you’re sick.

However, this would only be possible if the health insurance is trustworthy enough to ensure longevity and the ability to handle long-term claim payments. This is where the Incurred Claim Ratio (ICR) in health insurance comes in.

What Is Incurred Claim Ratio (ICR) In Health Insurance?

In health insurance, the Incurred Claim Ratio (ICR) is one of the most important ways to determine a company’s reliability. To find it, multiply the ratio between the total number of claims an insurance company pays out each year and the total fees it receives each year by 100.

What Is A Health Insurance Provider’s Incurred Claim Ratio (ICR)?

How do we figure out the Incurred Claim Ratio of a health insurance company? Let’s look at an example. Let’s say an insurance company got 100 crores in payments in a year. In the same year, the business paid 75 crores in claims. Then, its ICR is given by,

(75/100) * 100 = 75%

How Does The Incurred Claim Ratio (ICR) Help Health Insurers?

Each of the factors used to judge the reliability of a health insurance company is important in its way. When it comes to ICR, the following are essential:

The Future Financial Stability Of The Brand

The insurer’s ICR shows how it plans to settle claims. If the insurance company can balance making money for the business with paying out claims, that says a lot about how strong its finances are. So, you’re looking at a name that will be around for a long time and can be the best insurance for your long-term financial investment.

Insurer’s Claims Settlement Potential

If a brand has a good ICR, it’s doing everything it needs to do to make a good business profit without forgetting the claim payment standards. This means that the brand has enough money to settle its claims in the future as well. This means that claims will be turned down or partially settled less often in the future. That’s good news for people who already have or are considering getting a policy.

How Can the Incurred Claim Ratio (ICR) Be Used to Select the Best Health Insurance?

Now that you understand the Incurred Claim Ratio (ICR) in health insurance, why it’s essential, and how to figure it out, let’s look at the different ICR numbers and what they mean for a health insurer.

Case 1: If The ICR Is Less Than 50

This shows that the insurance company focuses more on making money for its business. So, you can expect some of your claim settlements to fall through the cracks, such as only partially paid or turned down as acceptable.

Case 2: If the ICR falls between 50 and 70

This ICR band is just right. It shows that the insurance company strikes the best mix between making money for the business and meeting the needs of its clients for claim payments. This means that the company should be able to keep making money. Even if the numbers are in the 80s, that’s fine because the company is putting the needs of its customers ahead of making money, which is possible.

Case 3: If The ICR Is More Than 100

In this case, the insurance company is losing money because it has to pay out more in claims than it gets in fees. This might look like a good idea, but you can be sure it’s only a short-term fix. With these costs, the insurance company will soon run out of money, which could make its future uncertain.


In health insurance, the Incurred Claim Ratio (ICR) is a crucial indicator of how trustworthy and financially stable an insurer is. It shows how well the insurance company can balance making money with paying out claims. A higher ICR, ideally between 50 and 70 (or slightly higher), means the insurance company is financially stable and likely to settle claims quickly.

If the ICR is less than 50, earnings are more critical than claim settlement, which could cause problems with claim payments. People buying a health insurance policy should look at the ICR of different companies to ensure they choose a company that can keep their long-term financial promises. 


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