Health Insurers Collected Rs. 1.1 Lakh Cr, Paid Only 71% in FY24

Insurers paid just 71% of registered health claims in FY24 despite collecting ₹1.1 lakh crore in premiums. What’s happening with your health cover?

Highlights:

Insurers paid 71.3% of ₹1.2 lakh crore claims in FY24; ₹18,521 crore worth remained unpaid or denied
PSU insurers recorded the highest claims ratios but faced solvency challenges, while standalone insurers remained the most profitable
Insurance complaints surged to 37,182 this year, with over 6,200 resolved in favour of policyholders

Health insurers paid out only 71.3% of the ₹1.2 lakh crore in registered and outstanding claims in FY24, according to Insurance Regulatory and Development Authority of India (IRDAI) data ().

According to the insurance regulator's report, insurers received over 3 crore claims for ₹1.1 lakh crore this year, in addition to the 17.9 lakh claims worth ₹6,290 crore that were carried forward from previous years. Insurers paid approximately 2.7 crore claims, totalling ₹83,493 crore. These account for 82% of all reported claims by volume and 71.3% by value. Among the unpaid claims, ₹15,100 crore were "disallowed according to the terms and conditions of the policy contract". These claims do not show in the record, and there is no number assigned to them since the insurer determines that the claim does not fit the policy's specified conditions upon filing.

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‘Insurers paid only 71.3% of health claims in FY24, leaving ₹18,521 crore unpaid. Public sector firms struggle with solvency as complaints pile up. #healthinsurance #medindia’

Denied, Rejected, or Unpaid: The Fate of 56 Lakh Insurance Claims Worth ₹18,521 Crore

Insurance firms denied or rejected another 36 lakh claims totaling ₹10,937 crore. The remaining 20 lakh claims of ₹7,584 crore (6.4%) remain unpaid on the insured's books. Disallowed claims are those that are not registered at all. Repudiated claims are those that have been rejected following a thorough review of the records.

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Insurers Collect ₹1.1 Lakh Crore in Premiums, Pay ₹83,493 Crore in Health Claims

Insurers collected ₹1.1 lakh crore in health insurance premiums for the ₹83,493 crore in claims paid. Public sector insurers raised the most money, totaling ₹40,993 crore, followed by private insurers (₹34,503 crore) and independent health insurers (Rs 32,180 crore).

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PSU vs. Private Insurers: Claims Ratios and Profit Margins

In health, public sector undertaking (PSU) general insurers had the highest incurred claims ratio (claims reported/premium received), at 103%. Although PSU insurers received more in premiums than they paid out in claims under individual plans (95.7% claims ratio), the figure was distorted by loss-making government and group health enterprises, with claims ratios of 114.8% and 103.1%, respectively.

Private insurers experienced a greater loss margin in government business, with an incurred claims ratio of 121%. However, their total business was profitable, with a claims ratio of 88.7%, owing to decreased claims in individual (81.2%) and group insurance (90.8%).

Standalone health insurance businesses were the most profitable, with a claims ratio of 64.7%, followed by group insurance at 66.5% and individual insurance at 64%. These companies did not solicit government business. Interestingly, three PSU insurance companies have been expanding their operations without the statutory capital. According to Irdai, public sector insurers National, Oriental, and United declared solvency ratios of (-)0.45, (-)1.06, and (-)0.59 times, respectively, as of March 31, 2024.

Meanwhile, the insurance ombudsman's office received 34,336 health insurance complaints this year, adding to the 2,846 that were pending at the start of the year. Of these, 6,235 complaints were resolved in favour of the policyholder. The biggest number of complaints came from Mumbai, Pune, Ahmedabad, and Chandigarh.

Reference:

Health insurers disallow claims worth Rs 15,100 crore in FY24: IRDAI - (https://www.thestatesman.com/business/health-insurers-disallow-claims-worth-rs-15100-crore-in-fy24-irdai-1503381190.html)

Source-Medindia

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