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IRDAI data reveals that the health insurance companies both general insurers and standalone health insurers, paid Rs.7 out of the claim request of Rs.10 to policyholders in FY 2024.
Of the claim request of Rs.1.17 lakh crore in FY 2024, the health insurers paid Rs.83,493 crore or 71.29% of the total amount to policyholders last financial year.
A major portion of rejection was due to mismatch in client expectation and policy conditions. The data shows that health insurers rejected claim amounts of Rs.15,100 crore due to disallowed claims as per terms and conditions of policy contract. This means, health insurers rejected these claim requests as part of exclusions.
Further, the industry rejected 11.18% of the total claim amount while it carried 6.36% of the total claim amount to the next financial year.
If we look at the number of claims, the industry received 3.26 crore claims in FY 2024. Of these, the industry settled 2.69 crore claims or 82.46% of the total claim request in FY 2024.
The data shows that while the industry rejected Rs.11% of the total claim requests, the outstanding claims stood at 6% of the total claim requests in FY 2024.
Let us look at the table to know more:
| Total claims | Claims paid | Claims rejected as per terms and conditions of policy contract | Claims repudiated | Claims outstanding | |||||
| No. of claims | Claimed amount | No. of claims | Claimed amount | No. of claims | Claimed amount | No. of claims | Claimed amount | No. of claims | Claimed amount |
| 3.26 crore | Rs.1.17 lakh crore | 2.69 crore | Rs.83493 crore | 0 | Rs.15,100 | 36.40 lakh | Rs.10937 crore | 20.73 lakh | Rs.7584 crore |
| 100% | 100% | 82.46% | 71.29% | 0 | 12.90% | 11.18% | 9.34% | 6.36% | 6.48% |
Source:IRDAI
Sumit Bohra, President, Insurance Brokers Association of India (IBAI) and CEO of GlobeSecure Insurance brokers feels that the industry requires more granular data to arrive at any conclusion. He feels that the current data reflects both individual and group policies. While individual policies are subject to exclusions and waiting periods, group policies have mostly high claim settlement ratio due to absence of waiting period and pre-existing diseases.
Bohra said, “Health insurers don’t frivolously reject claims. Majority of rejection happens due to lack of understanding of what is covered and what is not covered.”
Sukhvinder Singh Bindra of Aastha Insurance Brokers also said that majority of rejection happens due to exclusion clauses like waiting period and pre-existing diseases. Also, the difference between claim amount and claim paid could be due to sub limit and co-payment clauses.
In a Linkedin post, Narendra Kumar Bharindwal, Vice President, IBAI, said, “In 2023-24, general and health insurers settled 2.69 crore claims, disbursing a remarkable Rs.83,493 crore with an average claim amount of Rs.31,086. This represents an 18% increase in net incurred claims, which stood at Rs.76,160 crore. Overall, 83% of registered claims were settled. However, the 11% repudiation rate—often due to policy exclusions or incomplete documentation—highlights areas where we can enhance transparency in claim processing and improve customer communication. It's also worth noting that 6% of claims remained pending as of March 31, 2024, suggesting a need for faster resolution mechanisms to bolster customer trust.”
Another interesting trend was the rise in cashless settlement. IRDAI data shows that insurers settled 66% of the total claim amount or Rs.55235 crore through cashless mode.
In addition, 31% claim settlement happened through reimbursement while insurers settled 2% claim amount through a combination of both cashless and reimbursement.