Health insurers in India disallowed claims worth ₹15,100 crore during the financial year 2023-24, according to the latest annual report from the Insurance Regulatory and Development Authority of India (IRDAI). This represents 12.9% of the total claims filed in that year. Claim disallowance occurs when an insurer refuses to process a claim due to issues with documentation or procedural discrepancies. It’s different from claim repudiation, where an insurer denies a claim after reviewing it and determining it does not meet the terms of the policy.
The total health insurance claims filed during the fiscal year amounted to ₹1.17 trillion. Insurers paid out ₹83,493.17 crore, settling 71.29% of the claims. However, ₹10,937.18 crore (9.34%) of claims were repudiated, while ₹7,584.57 crore (6.48%) of claims remained outstanding. In terms of volume, insurers processed 3.26 crore health insurance claims, successfully settling 2.69 crore of them, achieving a settlement rate of 82.46%. The average claim amount paid was ₹31,086.
The health insurance sector experienced significant growth in FY24. General and health insurers collected ₹1,07,681 crore in premiums, marking a 20.32% increase from the previous year. These insurers provided coverage to 57 crore lives under 2.68 crore health insurance policies. Third-Party Administrators (TPAs) were instrumental in the claims settlement process, handling 72% of claims, while the remaining 28% were processed directly by insurers. Additionally, 66.16% of claims were settled through the cashless mode, while 39% of settlements were made through reimbursements.
The report also highlighted the international expansion of public sector insurers such as New India Assurance, National Insurance, and Oriental Insurance, which generated ₹154 crore in gross premiums from health, personal accident, and travel insurance. These insurers covered 1.17 million lives abroad. The personal accident insurance sector also saw significant coverage, with 1,650.5 million lives insured during the fiscal year, including 901 million under government schemes like Pradhan Mantri Suraksha Bima Yojana (PMSBY).
To mitigate the risk of claim rejection, policyholders are advised to ensure complete and accurate documentation, understand their policy terms (especially regarding pre-existing conditions and waiting periods), and consult with their insurer or an advisor if there is any uncertainty before making a claim. These proactive steps can help reduce the likelihood of claim disallowance and improve the chances of successful claim settlements.
SOURCE :
BUSINESS STANDARD
