Health Insurers Settle 71% of Rs 1.2 Lakh Crore Claims in FY24
In a recent report released by the Insurance Regulatory and Development Authority of India (Irdai), it has been revealed that health insurers have settled only 71.3% of the whopping Rs 1.2 lakh crore claims that were registered and outstanding during the financial year 2024. The data paints a concerning picture of the health insurance landscape in the country, shedding light on the challenges faced by both insurers and policyholders.
Challenges Faced by Insurers and Policyholders
According to the report, insurers recorded over 3 crore claims amounting to Rs 1.1 lakh crore during the year, in addition to the 17.9 lakh claims worth Rs 6,290 crore that were carried forward from previous years. Out of these claims, insurers managed to settle nearly 2.7 crore claims totaling Rs 83,493 crore. However, a significant chunk of claims amounting to Rs 15,100 crore were disallowed due to non-compliance with policy terms and conditions. Additionally, 36 lakh claims worth Rs 10,937 crore were outright rejected by insurance companies, leaving policyholders in limbo.
The remaining 20 lakh claims for Rs 7,584 crore continue to linger on the books of the insured, highlighting the need for a more efficient and transparent claims settlement process. The report also revealed that against the Rs 83,493 crore of claims paid out, insurers collected a staggering Rs 1.1 lakh crore in health insurance premiums, underscoring the financial implications of the claims settlement process.
Insights into the Health Insurance Landscape
The report further delves into the incurred claims ratio, a key metric that measures the claims reported against the premium collected by insurers. Public sector insurers recorded the highest incurred claims ratio at 103%, indicating a higher payout compared to premium collection. On the other hand, private insurers and standalone health insurance companies exhibited varying trends in claims settlement, with private insurers facing challenges in government business and standalone companies emerging as the most profitable players in the health insurance sector.
Need for Transparency and Accountability
The findings of the report underscore the importance of transparency and accountability in the health insurance sector. With a significant number of claims either disallowed or rejected, there is a pressing need for insurers to streamline their claims settlement processes and ensure timely and fair resolution for policyholders. As policyholders navigate the complexities of the health insurance landscape, it is imperative for insurers to uphold the trust and confidence of their customers by prioritizing transparency and accountability in claims settlement.
In a rapidly evolving healthcare ecosystem, the onus is on insurers to adapt to changing dynamics and prioritize the needs of policyholders. By fostering a culture of transparency, accountability, and fairness, insurers can not only enhance customer satisfaction but also strengthen the overall health insurance landscape in the country.