What Is Incurred Claim Ratio?
The Incurred Claim Ratio (ICR) is the total value of claims an insurer paid divided by the total premium it collected in a financial year. An ICR of 80% means the insurer paid ₹80 in claims for every ₹100 of premium collected. It measures how much value an insurer returns to policyholders.
How Incurred Claim Ratio Works
ICR = (claims paid ÷ premium collected) × 100, reported annually by IRDAI.
- 50%–100% is generally healthy – the insurer pays out a fair share of premium.
- Below 50% can signal either very high pricing or conservative claim payouts.
- Above 100% means the insurer paid more in claims than it collected – good for policyholders short-term, but not sustainable, and may push future premiums up.
Example
An insurer collects ₹1,000 crore in health premium and pays ₹850 crore in claims over the year. Its ICR is 85% – a healthy figure suggesting it returns most of its premium as claims.
Why Incurred Claim Ratio Matters
ICR complements the Claim Settlement Ratio (CSR). CSR tells you the percentage of claims paid by count; ICR tells you the share of premium paid out by value. A high CSR with a very low ICR can hint at many small claims paid but large ones contested. Check both before choosing an insurer.
Frequently Asked Questions
What is a good incurred claim ratio?
Broadly, 50%–100% is considered healthy. It means the insurer pays out a fair share of the premium it collects without being financially unsustainable. Persistently below 50% may indicate high pricing or tight claim payouts.
What is the difference between ICR and CSR?
CSR (Claim Settlement Ratio) is the percentage of claims paid by number; ICR (Incurred Claim Ratio) is claims paid as a percentage of premium collected, by value. CSR reflects reliability; ICR reflects value returned.
Where can I find an insurer's incurred claim ratio?
IRDAI publishes ICR for every insurer in its Annual Report and the Handbook on Indian Insurance Statistics each financial year.
Related guides:
Glossary: Full Insurance Terms Glossary
Disclaimer: Educational content reflecting 2026 rules. Always read your policy wording. NYVO is an IRDAI-registered corporate agent.
