Rising Rejections and Repudiations
In FY 2023-24, health insurance companies in India disallowed and repudiated claims worth ₹26,000 crore, marking a significant 19.10% increase from ₹21,861 crore in FY23. This highlights growing challenges in the claims process within the health insurance sector, as reported by the Insurance Regulatory and Development Authority of India (IRDAI) in its annual report.
- Disallowed Claims: Increased from ₹12,754 crore in FY23 to ₹15,100 crore in FY24.
- Repudiated Claims: Rose to ₹10,937 crore in FY24 from ₹9,107 crore in the previous year.
Claims Paid and Settlement Ratios
Despite the rise in claim rejections, total claims paid by insurers in the health segment rose by 17.71% to ₹83,493 crore, compared to ₹70,929 crore in FY23.
- Public Sector Insurers: Achieved a claims settlement ratio of 103.38%, reflecting robust claims processing.
- Private Sector Insurers: Maintained profitability with a settlement ratio of 88.71%.
- Standalone Health Insurers: Struggled with a lower claims ratio of 64.71%, indicating challenges in balancing claims management and profitability.
Key Metrics and Trends
1. Number of Claims Settled:
- General and health insurers settled 2.69 crore health insurance claims in FY24.
- Average claim amount paid: ₹31,086 per claim.
2. Settlement Methods:
- Cashless Mode: 66.16% of claims.
- Reimbursement Mode: 39% of claims.
3. Settlement Efficiency:
- 83% of claims registered were settled, 11% repudiated, and the remaining 6% were pending as of March 31, 2024.
Death Claims and Life Insurance Trends
- Death Claims Paid: ₹48,512 crore in FY24, up from ₹46,380 crore in FY23.
- Individual Business: ₹28,868 crore.
- Group Business: ₹19,644 crore.
Industry Growth Highlights
The non-life insurance industry recorded a 12.76% growth in direct premium, reaching ₹2.90 lakh crore in FY24.
- Public Sector Contribution: Increased by 8.88% to ₹90,252 crore.
- Private Sector Contribution: Including standalone health insurers, rose to ₹1.88 lakh crore from ₹1.58 lakh crore in FY23.
Challenges and Opportunities
The significant rise in claim rejections and repudiations underscores the need for:
- Enhanced Communication: Clearer policy terms to reduce discrepancies in claims submissions.
- Stronger Oversight: Improved processes to minimize errors in documentation and adherence to policy conditions.
- Policyholder Education: Greater awareness among consumers about the importance of adhering to policy terms and submitting accurate claims.
Conclusion
The health insurance sector in India faces critical challenges with increasing claim rejections and the need to improve customer-centric processes. While insurers are making strides in settling a larger volume of claims, balancing profitability with policyholder trust remains pivotal for sustained growth.
