Health insurance claims jump 11% YoY to Rs 94,248 crore in FY25, cashless settlements dominate

Government schemes accounted for 42.3 percent of lives covered, the largest share, followed by group policies at 47.4 percent, and individual policies at 10.3 percent.

• Health insurers paid Rs 94,248 crore for 3.26 crore claims in FY25, up 11%.
• Cashless settlements made up 58 percent of claims and 66 percent of claim value
• Group policies contributed 52.3 percent of total health insurance premiums

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India’s health insurance sector saw an 11 percent jump in claim payouts in FY25, with general and health insurers paying Rs 94,248 crore for 3.26 crore claims covering 58 crore lives under 2.65 crore policies, according to the recent annual report by Insurance Regulatory and Development Authority of India (IRDAI)

Cashless settlements dominated, accounting for 58 percent of claims by number and 66 percent by value.

Government-sponsored schemes covered 42.3 percent of lives, while group policies contributed the highest share of premiums at 52.3 percent.

The incurred claims ratio improved to 86.98 percent from 88.15 percent last year.

India’s health insurance sector witnessed a significant rise in claim settlements in 2024-25.

General and health insurers covered 58 crore lives under 2.65 crore health insurance policies, excluding personal accident and travel insurance products.

Health insurance is divided into three segments: government-sponsored, group, and individual policies. Government schemes accounted for 42.3 percent of lives covered, the largest share, followed by group policies at 47.4 percent, and individual policies at 10.3 percent.

However, in terms of premium collection, group policies dominated, contributing 52.3 percent of total premiums, while individual and government-sponsored policies accounted for 39.7 percent and 8 percent, respectively.

The total net incurred claims under health insurance rose to Rs 84,850 crore, up 11 percent from the previous year. Notably, the incurred claims ratio (ICR) for health business improved to 86.98 percent from 88.15 percent in 2023-24.

During the year, insurers settled 3.26 crore health insurance claims, paying Rs 94,248 crore, with an average payout of Rs 28,910 per claim.

Of these, 69 percent of claims were processed through third-party administrators (TPAs), while the remaining 31 percent were handled in-house. Cashless claims accounted for 58 percent of claims by number and 66.35 percent by amount, with 41 percent of claims processed through reimbursement mode and 1 percent using a combination of both.

The efficiency of claims settlement has improved, with insurers settling about 87 percent of claims registered during the year. Around 8 percent of claims were repudiated, while 5 percent remained pending as of March 31, 2025.

Life insurers also reported health insurance claims, settling 28,770 claims worth Rs 311 crore, representing 80 percent of claims registered. Rider claims were even higher in settlement rates, with 98 percent of claims paid, totalling Rs 137 crore across 27,775 claims.