Claim Settlement Ratio: What It Really Means and Which Insurers Actually Pay Up in 2026
Priya’s mother had been renewing the same health insurance policy for 11 years. She never missed a premium. Never filed a claim.
In early 2025, she was admitted for a kidney procedure. The insurer denied the claim — citing a hypertension diagnosis that hadn’t been disclosed when the policy was first taken out.
What Priya’s family didn’t know was that under the IRDAI Master Circular of May 2024, after 5 continuous years of policy renewal, an insurer can no longer reject a claim on grounds of a pre-existing condition — except in cases of proven fraud. They had the law on their side and didn’t know it.
This kind of story plays out thousands of times a year. The IRDAI Annual Report for FY 2024-25, released in 2025, shows that 8% of all health insurance claims filed that year were repudiated — roughly 1 in every 12. Of the 3.26 crore claims processed, over 26 lakh weren’t settled. The premiums came in. The money didn’t go back.
The Claim Settlement Ratio is supposed to help you pick an insurer that pays. The problem: most people misread it. And even when they read it correctly, they’re looking at the wrong number.
What this article covers
What Claim Settlement Ratio Actually Means
The Claim Settlement Ratio (CSR) looks simple. It’s the percentage of claims an insurer paid out of all the claims it received.
99% CSR means 99 out of every 100 claims were settled. 97% means 3 were rejected.
But here’s what trips people up — CSR works differently for life insurance and health insurance, and comparing them directly is a mistake.
For life insurance (think term plans), IRDAI tracks individual death claim settlement. The overall industry CSR — LIC plus all private insurers — was 96.82% for FY 2023-24, per the IRDAI Annual Report 2024-25. Private insurers alone, looking at claims settled within 30 days, clocked approximately 99%.
For health insurance, the IRDAI’s February 2026 disclosure measures the percentage of claims settled within 3 months. That’s a different window, a different type of claim, and a different number. An 87.5% claim settlement rate by volume for health (from the same IRDAI Annual Report) sounds alarming — but it includes claims still pending at year-end, not just rejections.
The relevant question for health is: out of claims that reached a decision, how many were paid? And how quickly?
The Number Nobody Tells You: Amount Settlement Ratio
Here’s the number most comparison sites don’t show you.
CSR counts claims. A small OPD claim of ₹4,000 is the same “1 claim” as a ₹25 lakh critical illness hospitalisation. An insurer can maintain a 99% CSR by settling every small claim while dragging its feet on — or outright rejecting — the large ones.
The Amount Settlement Ratio (ASR) cuts through this. It measures the percentage of the total claimed amount that was actually paid.
Consider what this means practically: if your nominee files a death claim for ₹1 crore on a term plan, CSR tells you whether the claim was settled. ASR tells you whether the full ₹1 crore was paid — or whether part of it was reduced or disputed.
For FY 2023-24 (the latest full-year data available in the IRDAI Annual Report 2024-25 and Life Insurance Council), HDFC Life’s ASR was approximately 99.98%. For every ₹100 worth of death claims filed, ₹99.98 was paid. That’s the kind of number you want behind a ₹1 crore or ₹2 crore policy.
When you’re comparing insurers, always check both CSR and ASR. A 99% CSR with a 93% ASR is an insurer settling many small claims and fighting the big ones.
Life Insurance CSR Data FY 2024-25 — Which Insurers Pay Up
The table below uses data from the IRDAI Annual Report 2024-25, the Life Insurance Council, and individual insurer disclosures. Where FY 2024-25 full-year figures were unavailable at time of writing, FY 2023-24 IRDAI annual data is used (as noted in the source footnote).
| Insurer | CSR (Individual Death Claims) | Amount Settlement Ratio | Notes |
| HDFC Life | 99.39% | ~99.98% | Highest ASR in private sector |
| Axis Max Life | 99.70% | ~99%+ | FY24-25; self-reported, IRDAI-verified |
| ICICI Prudential Life | 99.17–99.75% | ~98.33% | Strong across both metrics |
| Tata AIA | 99.41% | 98.57% | Competitive premiums + strong settlement |
| Max Life | 99.22% | ~99%+ | Consistently top-3 private sector |
| SBI Life | 97.35–97.69% | ~96%+ | Large PSU distribution, solid settlement |
| LIC | 98.82% | ~96%+ | Largest by volume; 1.98 lakh claims Q1 FY26 |
| Bajaj Allianz Life | 97.69% | ~96% | Established mid-range private insurer |
Source: IRDAI Annual Report 2024-25 and Life Insurance Council. FY 2024-25 full-year data expected mid-2026; Q1 FY26 from quarterly insurer disclosures.
For a pure term plan, the minimum bar: CSR above 97% and ASR above 97% consistently across at least 3 years. The premium difference between a 99.5% CSR insurer and a 97% one is typically ₹1,000–₹2,500 per year on a ₹1 crore cover. That is not a gap worth optimising away.
If you haven’t worked out how much term cover you actually need: How Much Term Insurance Do I Actually Need? A Salaried Indian’s Honest Guide
Health Insurance CSR Data FY 2024-25 — The IRDAI February 2026 Release
In February 2026, IRDAI released claim settlement ratio data for health and general insurers for FY 2024-25. This data measures claims settled within 3 months of receipt.
Standalone health insurers
Standalone health insurers were the strongest performers, per IRDAI February 2026 disclosure (AngelOne, February 5, 2026):
| Insurer | CSR (Claims Settled Within 3 Months) |
| Aditya Birla Health Insurance | 100% |
| Galaxy Health Insurance | 100% |
| Narayana Health Insurance | 100% |
| Niva Bupa Health Insurance | 100% |
| Star Health Insurance | 99.06% |
| Industry average (all standalone health) | 99.93% |
Private general insurers
Private general insurers showed more variation:
| Insurer | CSR (Within 3 Months) |
| Acko General | 99.98% |
| Reliance General | 99.32% |
| HDFC ERGO | 98.85% |
| ICICI Lombard | 98.45% |
| IFFCO Tokio | 85.27% |
| Kshema General | 26.88% |
Public sector general insurers
National Insurance, New India Assurance, Oriental, and United India settled between 90.17% and 95.26% of claims within 3 months. Source: IRDAI February 2026 disclosure via AngelOne, February 5, 2026.
Kshema General’s 26.88% is an outlier — it’s a smaller, newer insurer. But it is a real number from a real IRDAI disclosure, and it shows why checking CSR before buying matters.
Why a High CSR Can Still Mean Your Claim Gets Rejected
A 99% CSR does not mean your claim can’t be the 1% that gets rejected. And for health insurance, even a 100% CSR (within 3 months) doesn’t guarantee your specific claim gets paid.
The most common reasons claims fail have nothing to do with insurer behaviour — they’re on the policyholder’s side.
- Waiting periods not completed. Most health policies have a 2–4 year waiting period for pre-existing conditions. A person diagnosed with diabetes in 2022 who buys a policy in 2023 and claims for a diabetes-related hospitalisation in 2024 will almost certainly be rejected.
- Non-disclosure. Any chronic condition, prior surgery, or ongoing medication must be declared when buying the policy. Hiding them is the single biggest reason life insurance claims fail — and the insurer can investigate medical records going back years.
- You have the 5-year moratorium protection after 5 years. Under the IRDAI Master Circular of May 29, 2024, once you have 5 continuous years of renewal with the same insurer, they cannot reject your health claim citing non-disclosure of a pre-existing condition — except in proven fraud cases. Previously this window was 8 years. If your policy is already 5 or more years old with the same insurer, you have this protection now.
- Sub-limits and caps you didn’t notice. A ₹5 lakh employer group policy might cap room rent at ₹3,000 per day in a city where rooms cost ₹8,000–₹15,000. The insurer pays their proportionate share of everything — and you pay the rest. The average hospitalisation claim in India crossed ₹60,000 in FY25, per the IRDAI Annual Report 2024-25. For serious urban procedures, it’s far higher.
- Documentation gaps. Missing discharge summaries, bills with incorrect dates, or pharmacy receipts without prescriptions are administrative — not coverage — reasons for rejection. Fixable, but painful at 11pm in a hospital corridor.
This is why your employer’s group cover is rarely sufficient on its own: Is Your Employer’s Health Insurance Actually Enough?
What the IRDAI Master Circular (May 2024) Changed for You
On May 29, 2024, IRDAI released a Master Circular that repealed 55 previous health insurance circulars in one move. Most policyholders haven’t read it. But it gives you real, enforceable rights that didn’t exist two years ago.
- 1-hour cashless pre-authorisation. Effective July 31, 2024, every health insurer must approve or reject a cashless pre-authorisation request within 1 hour of receiving it. If your admission request sits unanswered after that window, you have grounds for an immediate grievance.
- 3-hour discharge approval. Final cashless clearance for hospital discharge must come within 3 hours of the hospital submitting the request. If the insurer delays beyond this, any extra charges incurred are borne by the insurer from their shareholder fund — not yours.
- 5-year moratorium. After 5 continuous renewal years with the same insurer, a pre-existing condition cannot be cited to deny your claim (except fraud).
- ₹5,000/day penalty for ombudsman non-compliance. If an insurer loses at the Insurance Ombudsman and doesn’t implement the award within 30 days, they owe you ₹5,000 per calendar day — in addition to any penal interest.
- Cashless Everywhere. Cashless treatment must now be offered at any hospital meeting basic registration norms — not just network hospitals. This is particularly impactful if you need emergency treatment in a smaller city or at a hospital outside your insurer’s panel.
As of the latest available data, approximately 87% of cashless pre-authorisations are being processed within the 1-hour window, and 97% of discharge approvals meet the 3-hour limit (IRDAI data via AngelOne, December 2025).
What this means practically: save your insurer’s claims helpline in your phone. Save the IRDAI Bima Bharosa portal (bimabharosa.irdai.gov.in) in your bookmarks. If a claim is denied or delayed, you have a regulated escalation path with deadlines on the insurer — not just on you.
ICR — The Other Number to Check for Health Insurance
For health insurance, there’s a third number worth understanding: the Incurred Claim Ratio (ICR).
ICR = Total claims paid ÷ Total premiums collected × 100
Per Business Standard (January 1, 2026), drawing from IRDAI Annual Report 2024-25 data, the non-life industry’s overall ICR for FY 2024-25 was 82.88% — meaning insurers paid out ₹82.88 in claims for every ₹100 collected as premiums.
The healthy range: 70–90%. An ICR below 70% suggests very conservative claims handling or aggressive underwriting. An ICR consistently above 95% is a financial stress warning — which can translate into sharp premium hikes or, in extreme cases, slower claim processing.
| Health Insurer | ICR FY 2024-25 |
| HDFC ERGO General | 84.85% |
| ICICI Lombard General | 82.24% |
| Bajaj Allianz General | 87.31% |
| Star Health (standalone) | 70.30% |
| Niva Bupa (standalone) | 61.22% |
| Care Health (standalone) | 64.53% |
| ManipalCigna (standalone) | 74.81% |
| New India Assurance (public) | 100.98% |
| Oriental Insurance (public) | 102.58% |
Source: IRDAI Annual Report 2024-25, as reported by Business Standard, January 1, 2026.
The standalone health insurers (Niva Bupa at 61.22%, Care Health at 64.53%) have low ICRs but also high CSRs. That combination — high CSR, low ICR — usually reflects younger policyholders and selective underwriting, not claim suppression. Track the ICR trend over 3 years rather than fixating on a single year’s number. A consistently rising ICR moving toward 95% is the warning sign.
The public sector insurers above 100% (New India, Oriental) are paying out more in claims than they collect — which partly explains why their premiums have been rising steadily.
How to Actually Use This Before Buying a Policy
Three checks. Do them in this order.
- CSR — at least 3 years in a row, not just the latest. Any insurer can have a good year. For a term plan, 97%+ CSR every single year for at least 3 years. For health, 95%+ over 3 years. IRDAI publishes annual reports — the data is public and free at irdai.gov.in.
- ASR for life / ICR for health. For term: ASR above 97%. For health: ICR between 70–90%, not falling below 60% or consistently above 95%.
- Claim process quality. How many hospitals are on the cashless network? Is there an online claims portal? The IRDAI Bima Bharosa system now integrates with every insurer’s complaint system. The IRDAI 2024-25 report shows 2,57,790 grievances raised in FY25, with 4,811 exceeding resolution time. Check where your insurer sits.
For a ₹1 crore term plan, a 30-year-old non-smoker in good health will pay approximately ₹10,500–₹12,000 per year at top-rated private insurers (Tata AIA, HDFC Life, Max Life, ICICI Prudential), per indicative 2025 premium data from Finvastra.
If you’re still mixing insurance with investment: Why ULIPs Are Sold As Investments — But Avoided by Most Advisors
For choosing a health policy: How to Choose the Right Health Insurance Plan in India
If tax-saving on health premiums is on your mind: Section 80D Explained — How to Save Tax on Health Insurance Premiums
What to Do This Week
- Pull up your insurer’s CSR. Google your insurer’s name + “CSR IRDAI 2024-25”. Write the number down. If it’s below 97% for a term plan or below 90% for health — that’s worth fixing at renewal.
- Check ASR (life) or ICR (health). Download the IRDAI Annual Report 2024-25 from irdai.gov.in. Find your insurer. Note the number.
- Update your nominee details. Log in to your life insurer’s portal right now. Confirm nominee name, relationship, and percentage are correct and current. An incorrect nominee is the reason many death claims take months — or never reach the right person. Don’t let an administrative gap become your family’s problem.
- Set up auto-renewal for health. A single break in renewal resets the moratorium clock to zero. Set a NACH mandate or a calendar reminder so it never lapses — even by a day.
- Bookmark the IRDAI Bima Bharosa portal. Go to bimabharosa.irdai.gov.in. If a claim is ever rejected, this is your first step — before paying out of pocket, before accepting the rejection, before moving on. The ombudsman process is free and has legal teeth.
- Audit your health cover amount. The average hospitalisation claim in India crossed ₹60,000 in FY25 (IRDAI Annual Report 2024-25). Serious urban procedures run ₹5–25 lakh. A ₹3 lakh employer group policy does not cover that. If your total health cover — employer policy plus personal — is under ₹10 lakh for a family, consider adding a top-up or super top-up plan.
Related reading on The Salary Investor
- How Much Term Insurance Do I Actually Need? A Salaried Indian’s Honest Guide
- Health Insurance from Your Employer — Is It Actually Enough?
- How to Choose the Right Health Insurance Plan in India
- EPF Interest Rate History
- Term Insurance Riders Explained
Disclaimer: Data in this article is sourced from the IRDAI Annual Report 2024-25, IRDAI February 2026 CSR disclosures, and IRDAI Master Circular dated May 29, 2024. CSR, ASR, and ICR figures change annually — always verify from the latest IRDAI publication before making any decision. The opening scenario is a composite illustrative example reflecting documented common causes of claim rejection in India; it is not a specific named case. This article is for general financial education only and does not constitute financial, insurance, or investment advice. Consult an IRDAI-licensed insurance broker or SEBI-registered financial advisor before purchasing or modifying any insurance policy. Returns and claim outcomes are not guaranteed and are subject to policy terms and conditions.
Sources: IRDAI Annual Report 2024-25 (Life Insurance Council / IRDAI, 2025) • IRDAI Releases 2026 Claim Settlement Ratios — Health and General Insurers FY 2024-25 (AngelOne, February 5, 2026) • Paying Claims or Pushing Back? What IRDAI Data Reveals About Insurers — ICR FY 2024-25 (Business Standard, January 1, 2026) • IRDAI Mandates Health Insurers to Decide on Cashless Claims Within 1 Hour (Business Standard, May 29, 2024) • IRDAI Annual Report 2024-25 Highlights — Health Claims, Repudiation Rates, Grievances (Algates Insurance, March 2026) • Term Insurance Claim Settlement Ratio FY 2024-25 — Insurer-wise Data (Finvastra, May 2026)
He figured out most of what he knows about personal finance not from courses or advisors, but from years of reading, making mistakes, and fixing them. The Salary Investor is his attempt to save other salaried Indians the same time and money.
He is not a CA or a SEBI-registered advisor. He writes as a fellow salaried person who has been in the trenches — navigating EPF, ITR, 80C, salary slips, and market volatility.