INDIA MONEY REPORT · EDITION #2 · AUGUST 2026
The Health Insurance Payout Gap — What Insurers Return Per ₹100 of Premium
A data study by Priyanka Personal Finance analysing insurer-wise health incurred-claims ratios from IRDAI's Annual Report 2024-25. Free to cite with attribution. Journalists: custom data cuts available within 24 hours — contact us.
Published: 19 August 2026 · Author: Priyanka Dhawan · Primary source: IRDAI Annual Report 2024-25 · Cite as: "Priyanka Personal Finance, India Money Report #2, August 2026"
Key Findings (60-second version)
1. The 41-paisa gap. For the same Rs 100 of health premium, Oriental Insurance paid out Rs 102.58 in claims — Niva Bupa paid Rs 61.22. Same product category, a 41-paisa difference in what came back to policyholders.
2. One market, three different businesses. PSU general insurers returned 99.84% of health premiums as claims; private general insurers ~82-87%; standalone health insurers (the most heavily advertised category) 68.06%.
3. Every standalone health insurer sits below 75%. ManipalCigna 74.81, Aditya Birla 71.50, Star Health 70.30, Care 64.53, Niva Bupa 61.22.
4. The direction is improving. Standalone health ICR rose from 64.71% (FY 2023-24) to 68.06% (FY 2024-25). PSU ICR eased from 103.38% to 99.84%.
5. Health premiums crossed Rs 1.27 lakh crore in FY 2024-25 (+9.19% YoY) — and since 22 Sept 2025, individual health premiums carry 0% GST, which makes the value-per-rupee question sharper, not softer.
Finding 1 — The 41-Paisa Gap
The Incurred Claims Ratio (ICR) answers one blunt question: of every Rs 100 an insurer collected as health premium, how many rupees went back out as claims? In FY 2024-25, the spread between the top and bottom of the market was extraordinary: Oriental Insurance at 102.58% paid out more than it collected, while Niva Bupa at 61.22% paid out less than 62 paise per rupee.
Neither extreme is automatically "good" or "bad" — an insurer paying over 100% is losing money on health underwriting, which usually ends in premium hikes or tighter claim scrutiny; an insurer near 60% is either superbly efficient, very young in its portfolio, or returning less value to customers. But the size of the gap is the point: two IRDAI-regulated insurers selling the same category of product returned amounts 41 paise apart per rupee of premium. Most buyers comparing plans never see this number.
Finding 2 — One Market, Three Different Businesses (Full Table)
Insurer-wise health ICR for FY 2024-25, grouped by category:
| Category | Insurer | Health ICR FY 2024-25 | Paid out per Rs 100 of premium |
|---|---|---|---|
| PSU general | Oriental Insurance | 102.58% | Rs 102.58 — more than it collected |
| PSU general | New India Assurance | 100.98% | Rs 102.58 — more than it collected |
| PSU general | United India Insurance | 97.51% | Rs 96-98 — near break-even |
| PSU general | National Insurance | 96.05% | Rs 96-98 — near break-even |
| Private general | Bajaj Allianz General | 87.31% | Rs 82-87 — comfortable band |
| Private general | HDFC ERGO | 84.85% | Rs 82-87 — comfortable band |
| Private general | ICICI Lombard | 82.24% | Rs 82-87 — comfortable band |
| Standalone health | ManipalCigna Health | 74.81% | Rs 70-75 — lower edge of comfort |
| Standalone health | Aditya Birla Health | 71.50% | Rs 70-75 — lower edge of comfort |
| Standalone health | Star Health & Allied | 70.30% | Rs 70-75 — lower edge of comfort |
| Standalone health | Care Health | 64.53% | Rs 61-65 — the value question |
| Standalone health | Niva Bupa Health | 61.22% | Rs 61-65 — the value question |
| All PSU general insurers (combined) | 99.84% | Rs 99.84 | |
| All standalone health insurers (combined) | 68.06% | Rs 68.06 | |
| Non-life industry overall (all lines) | 82.88% | Rs 82.88 | |
Source: IRDAI Annual Report 2024-25 (insurer-wise figures as compiled by Business Standard from the report). Rows in pink paid out more than collected; rows in amber are the lowest payout ratios in the market.
The pattern is structural, not accidental. PSU insurers carry older portfolios and large group/government-scheme books, which push claims up. Standalone health insurers have younger retail portfolios and spend heavily on distribution and marketing — costs that come out of the same premium rupee that could otherwise fund claims.
Finding 3 — The 70-90 Sweet Spot, and Who Sits Outside It
Analysts broadly treat an ICR between 70% and 90% as the healthy zone: enough claims paid to represent real value, enough margin to stay solvent without hiking premiums. Against that yardstick, FY 2024-25 looks like this:
Inside the band: Bajaj Allianz (87.31), HDFC ERGO (84.85), ICICI Lombard (82.24), ManipalCigna (74.81), Aditya Birla (71.50), Star Health (70.30 — just inside).
Above it: all four PSU insurers (96-103) — good for today's claimants, but an unsustainable equilibrium.
Below it: Care (64.53) and Niva Bupa (61.22) — the two insurers where the smallest share of premium came back as claims.
Finding 4 — The Direction of Travel
Comparing IRDAI's last two annual reports:
| Segment (health ICR) | FY 2023-24 | FY 2024-25 | Direction |
|---|---|---|---|
| Standalone health insurers | 64.71% | 68.06% | Rising — more premium coming back as claims |
| PSU general insurers | 103.38% | 99.84% | Easing toward break-even |
Two more data points frame the year. Health premiums grew 9.19% to Rs 1,27,417 crore — health is now the largest general-insurance line in India. And IRDAI's previous annual report (FY 2023-24) recorded health claim rejections rising 19.1% year-on-year — which is exactly why a payout-ratio lens matters alongside settlement counts.
One consumer-side change sharpens all of this: since 22 September 2025, individual health insurance premiums attract 0% GST. The tax saving went to buyers — but it also means the remaining premium is pure insurer economics. Where it goes (claims vs costs) is now the whole question, and ICR is the closest public answer.
What ICR Does NOT Tell You
It is not a rejection rate. ICR measures money out vs money in — an insurer can settle 99% of claims by count and still show a low ICR if its customers are young and claim small amounts. It hides the retail/group mix. PSU numbers are lifted by group and government-scheme business that individual buyers cannot access. It says nothing about speed or friction — for that, read our life-insurance study of IRDAI's 30-day settlement data (Report #1, linked below). Use ICR the way an analyst would: as one lens of three, alongside complaint volumes and cashless-network quality.
Methodology & Sources
Primary source: IRDAI Annual Report 2024-25 (segment-wise and insurer-wise incurred claims ratios for the health line; industry premium and claims aggregates). Insurer-wise figures cross-checked against Business Standard's compilation of the report and Outlook Money's coverage of the health-segment aggregates. FY 2023-24 comparatives from IRDAI Annual Report 2023-24 as reported at its release.
Definition used: Incurred Claims Ratio = net claims incurred ÷ net premiums earned, for the health segment, in the financial year. ICR is not the same as Claim Settlement Ratio (a count-based measure used mainly in life insurance).
Limitations: segment ICRs mix retail and group health; insurer-level ratios are portfolio-wide and not product-wise; a single year's ICR reflects portfolio age as much as claims behaviour. We flag these caveats in the findings rather than hide them.
Cite as: "Priyanka Personal Finance, India Money Report #2, August 2026." Free to cite with attribution. Journalists: custom data cuts within 24 hours — contact us.
Explore the Underlying Data
Full claim-settlement data page · Health insurance buying guide · Previous edition: Report #1 — The State of Life Insurance Claims · Tool: How much cover do you need?