Health insurers settle 71% of Rs 1.2 Lakh crore claims in FY 24

MUMBAI: Health insurers paid out only 71.3% of the Rs 1.2 lakh crore claims that were registered and outstanding during FY24, according to Irdai data.

According to the insurance regulator's report, insurers registered over 3 crore claims during the year for Rs 1.1 lakh crore, in addition to the 17.9 lakh claims for Rs 6,290 crore outstanding carried forward from earlier years.

Of these claims, insurers paid nearly 2.7 crore claims, amounting to Rs 83,493 crore. These represent 82% of the reported claims by volume and 71.3% by value. Of the claims that were not paid, Rs 15,100 crore worth of claims were "disallowed according to terms and conditions of the policy contract"." These claims do not appear in the record, and there is no number available for them as they are not entertained on submission because the insurer identifies that the claim does not meet specific criteria outlined in the policy.

Another 36 lakh claims for Rs 10,937 crore were repudiated or rejected by insurance companies. The remaining 20 lakh claims for Rs 7,584 crore (6.4%) continue to be outstanding on the books of the insured. Disallowed claims are the ones they do not registered at all. Repudiated claims are the ones rejected after scrutiny of documents. Against the Rs 83,493 crore of claims paid, insurers collected Rs 1.1 lakh crore by way of health insurance premiums. The highest among these was collected by public sector insurers, who raised Rs 40,993 crore, followed by private insurers (Rs 34,503 crore) and standalone health insurers (Rs 32,180 crore).

In health, the incurred claims ratio - claims reported/premium collected - for PSU general insurers was the highest at 103%. Although PSU insurers collected more by way of premium than they paid out as claims under individual policies (95.7% claims ratio), the ratio was skewed because of loss-making govt and group health businesses, which had incurred claims ratios of 114.8% and 103.1%, respectively.

Private insurers had a higher loss margin in govt business, with an incurred claims ratio of 121%. However, their overall business was profitable, with a claims ratio of 88.7% because of lower claims in individual (81.2%) and group insurance (90.8%).

Standalone health insurance companies had the most profitable health insurance business with a claims ratio of 64.7%, with 66.5% in group and 64% in individual. These companies did not write govt business. Incidentally, three PSU insurance companies have been growing their businesses without the statutory capital. According to Irdai, public sector insurers - namely National, Oriental and United - have reported solvency ratio of (-)0.45, (-)1.06 and (-)0.59 times respectively, as on March 31, 2024.

Meanwhile, the office of the insurance ombudsman received 34,336 complaints under health insurance during the year, in addition to the 2,846 outstanding at the beginning of the year. Of these, 6,235 complaints were decided in favour of the policyholder. The highest number of complaints were received from Mumbai, Pune, Ahmedabad, and Chandigarh.