A Study on Claim Ratio, Loss Ratio, and Profitability Dynamics in the Indian Health Insurance Sector

Amogh Prabhakar Bhandari 1, Ramya H P 2

1Student, Dayananda Sagar College of Engineering, Bangalore.

2Assistant Professor, Department of Management Studies, Dayananda Sagar College of Engineering, Bangalore.

Abstract - India's health insurance segment has expanded rapidly over the last decade, with gross premiums crossing Rs 1.27 lakh crore in FY25, yet this growth has not translated uniformly into underwriting profitability. This paper examines the claim ratio, loss ratio, and profitability dynamics of public sector, private, and standalone health insurers in India using recent regulatory data. The study finds that the industry-wide incurred claim ratio moderated from a pandemic-driven peak of 109.12% in FY22 to 86.98% in FY25, but this aggregate improvement masks sharp divergence across insurer categories. Public sector insurers continue to record claim ratios near or above 100%, particularly in the group health segment, resulting in persistent underwriting losses, while standalone health insurers maintain comparatively disciplined ratios near 68%. The paper argues that combined operating ratios in the 105-115% range across the broader non-life industry indicate that underwriting losses are routinely offset by investment income rather than core insurance profitability, raising questions about the long-term sustainability of current pricing and risk-selection practices.

Key Words:  claim ratio, loss ratio, health insurance, IRDAI, underwriting, profitability, India.