Health Insurance Claims Surge 21% in FY25, but Settlement Rates Fall Behind

Health insurance claims rose 21% in FY25, but the amount settled grew only 12.88%, widening the gap flagged by Irdai. Insurers settled 3.26 crore claims worth ₹94,247 crore, up from 2.69 crore claims in FY24. Rising healthcare costs, greater policy usage, and inefficiencies in claim settlement contributed to the mismatch. Public sector insurers recorded a high ICR of 103%, paying more than the premium collected, while standalone health insurers had a lower ICR of 64.71%. Premiums surged due to medical inflation, higher treatment costs, and increasing lifestyle diseases. Many businesses are now investing in preventive healthcare to manage rising expenses.