What is the full form of ICR in Insurance?
The ICR full form in insurance is Incurred Claim Ratio. It is generally the ratio between the net claims payment to the net premiums that are collected in a single financial year. It is an indicator of how shift the insurance company is in resolving the claims of its policyholders. The complete annual information of the ICR of all the insurance companies will be published by IRDAI each year.
Importance of ICR:
The ICR can be used to assess an insurance company’s financial standing. An unsatisfactory ratio may indicate bad financial health. As a result, insurance companies may raise their premiums, modify certain aspects of their offers, and maintain tight screening procedures in order to get back on track.
What does ICR indicate?
The ICR of an insurance company primarily addresses the company’s financial stability. Additionally, it demonstrates the insurer’s ability to resolve disputes. If the ICR is greater than 100%, then it means that the insurance company is not in a favorable position and it has paid more as claim settlements than as insurance premiums. If the ICR is less than 50%, it means the insurance company is doing profitably and that it gets more premiums than claims.