IRDA publishes “Incurred Claim Ratio” data in its annual report. The Incurred Claims Ratio (ICR) helps you pick health insurance or a general insurance company.
Incurred Claims Ratio (ICR) refers to the total amount of claims paid by a general insurance company divided by the total amount of premium collected during the same period. ICR determines the company’s ability to pay the claims raised by the insured people.
Let’s understand ICR with the help of an example.
For the 90% incurred claims ratio, Rs 900 is paid back as the amount of a claim for every Rs 1000 of premium collected during a given period. ICR is the ratio of the total claims paid to the premiums received.
|Incurred Claims Ratio = Net Claims Incurred/ Net Earned Premium|
An Incurred Claim Ratio of 75% implies that the company has compensated Rs 75 as claim payout for every Rs 100 collected as premium