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Difference Between Claim Settlement Ratio and Incurred Claim Ratio
Neviya LaishramMay 27, 2026
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When comparing health insurance plans in India, many buyers come across terms like Claim Settlement Ratio (CSR) and Incurred Claim Ratio (ICR). While both are important indicators of an insurer’s performance, they measure very different aspects of the insurance business. Knowing the difference between Claim Settlement Ratio and Incurred Claim Ratio can help you evaluate how efficiently an insurer settles claims and manages its overall claim payouts.
In this blog, you’ll learn what CSR and ICR mean, how they are calculated, and why both are important factors to keep in mind when selecting a health insurance policy.
Contents
What is Claim Settlement Ratio and How is it Calculated?
The claim settlement ratio (CSR) is the percentage of health insurance claims an insurer settles during a financial year. It helps measure how reliably an insurer pays claims. A high CSR suggests that the insurer has a strong track record of claim settlements.
The formula commonly used is:
CSR = [Total Claims Settled ÷ (Total Claims Received during the year + Outstanding Claims at the beginning of the year)] × 100
What is the Incurred Claim Ratio, and What is a Healthy ICR?
The Incurred Claim Ratio (ICR) is a measure of an insurer’s financial performance and claim payout experience. It is the ratio of claims paid to premiums collected. This metric is published every year in the IRDAI (earlier IRDA) reports.
The formula used is:
Incurred Claim Ratio (ICR) = (Total Claims Paid ÷ Total Premium Collected) × 100
A healthy ICR generally indicates that the insurer is balancing claim payouts and premium collections efficiently.
CSR vs ICR: What should matter more when choosing an insurer?
Both metrics are issued by the IRDAI, but have different purposes for the buyer. Health insurance CSR measures how efficiently an insurer settles claims, while ICR reflects how sustainably it manages claim payouts.
Conclusion
Comparing both CSR and ICR helps you understand how reliably and sustainably a health insurer handles claims in India. While a high CSR reflects efficient claim approvals, a balanced ICR indicates long-term financial stability. Reviewing both metrics together can help you choose the right health insurance policy beyond just low premiums.
ACKO, a digital-first insurer, focuses on faster claim processing, transparent policy terms, and seamless cashless health insurance services to deliver a smoother customer experience. Explore ACKO Health Insurance plans to compare coverage options and choose a plan that best suits your healthcare needs.
FAQs
Below are some of the most commonly asked questions about difference between claim settlement ratio and Incurred claim ratio
1. Where can I find the IRDAI claim settlement ratio data?
You can find the official data on the IRDAI website (irdai.gov.in) and in the IRDAI Annual Reports. Most insurers also post these figures in their public disclosure sections.
2. Is 100% CSR always the best choice?
No, a 100% claim settlement ratio is not always enough to judge an insurer. New insurers may have fewer claims, which can temporarily inflate their CSR. It is better to compare long-term consistency, incurred claim ratio, and overall claim settlement history.
3. Does CSR cover both cashless and reimbursement claims?
Yes, the claim settlement ratio of health insurance companies is inclusive of all types of claims settled, whether they were settled through cashless health insurance at a network hospital or reimbursed later.
4. How does ICR impact my premium in health insurance?
If an insurer consistently has a high ICR (for example, above 100%), it may revise premiums for certain health insurance products to manage rising claim costs and maintain financial sustainability.
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