CSR of an insurance company

Does CSR of an insurance company include wrong or fraudulent claims too?


Claim Settlement Ratio (CSR) will include all claims received by the insurance company. There will be no differentiation between genuine and fake claims for calculating this ratio.

This ratio is calculated as follows:

Number of claims settled / number of claims received.

E.g. An insurance company receives 10 claims. Out of these, 7 are settled. Therefore, the CSR is 70%. Simple!

The rest of the claims are, of course, rejected due to a number of reasons. Of course, fraudulent claims will be rejected. So, the insurance company that settles higher claims will be preferred for obvious reasons. Generally, CSR is expressed as a percentage and could range anywhere between 10% and 99%. The corollary ratio is the rejection ratio, which will give the percentage of claims rejected. This can be anywhere between 3% to 37%, depending on the insurance firm.

There are a number of reasons why you shouldn’t use CSR as a single parameter for choosing an Insurance policy:

There are a number of reasons why claims might get rejected including the fact that there might be many fraudulent claims. Any time, any season, there are going to be frauds making claims and insurance firms will reject them. This is why CSR for insurers might never be 100%. Also, this is the reason why newer insurance firms might reject more claims (fraudsters think it is easy to trick new firms!).

Another popular reason for rejection is the lack of awareness on the part of the customers. Customers, like you, file claims without knowing whether the policy covers it. Some also have the habit of filing claims very late, leading to rejection.

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BB Expert