I'm in India, and I'm currently trying to understand the accounting (i.e. simple arithmetic) of the Public Disclosure information of Indian insurance companies. The context is that I'm trying to figure out what health insurance policy I should buy. It's also useful to be able to read and understand such statements.
I realise that most people on the site are not Indian, but I hope that the way these companies present their information is sufficiently similar to other places that non-Indians can make sense of it. Because I am currently having difficulty doing so.
Here are two documents which I downloaded off the web. The first is:
The second is:
I'm interested in health insurance, so consider the following data about IFFCO Tokio from both these sources. NOTE: I'm not specially interested in IFFCO Tokio; I'm just using it as an example.
The first, "GENERAL INSURANCE CLAIM INSIGHTS A POLICYHOLDERS HANDBOOK - 4th Edition" is a handbook produced by an organization calledInsurance Brokers Assocation of India (IBAI), and appears to be designed to help people make a decision about which insurer to buy found this PDF online. It does not appear to be on the organization's web site, though earlier versions of this handbook are. The handbook does not cite its sources for the published statistics. It just mentions the term "based on public disclosure by each insurer themselves on their website as required under IRDAI's public disclosure of data requirements." See Methodology (page 5 of the handbook).
Some statistics for IFFCO Tokio from this handbook are as follows.(Percentages only - no counts are given.)
(From pg no 65 of the handbook)
CLAIMS SETTLEMENT RATIO NO. OF CLAIMS AVAILABLE FOR PROCESSING 96.57% (for year ended March 31, 2019) 3,37,020
(pg no 69)
CLAIMS REPUDIATION RATIO 24.64% (for year ended March 31, 2019)
(pg no 71)
CLAIMS OUTSTANDING RATIO 3.77% (for year ended March 31, 2019)
The percentages make little sense to me. From the definitions, it looks like it should be true that:
CLAIMS SETTLEMENT RATIO + CLAIMS REPUDIATION RATIO + CLAIMS OUTSTANDING RATIO = 100%
but that is not the case. Not even close.
96.57% + 24.64% + 3.77% = 124.98%
So what am I not understanding about these definitions?
The second example is from
https://www.iffcotokio.co.in/content/dam/iffcotokio/iffco-pdf/sites/default/files/Public%20Disclosure%20March%202019_0.pdf which is a public disclosure document from IFFCO Tokio for the 2018-2019 financial year.
From Page 47 of 72
FORM NL-25 : Quarterly claims data for Non-Life (Column 9) Date: 1st Apr'18 to 31st Mar'19
(just the Health column)
Health Claims O/S at the beginning of the period 27605 Claims reported during the period 309415 Claims Settled during the period 325468 Claims Repudiated during the period 33166 Claims closed during the period 0 Claims O/S at End of the period 12707 Less than 3 months 7522 3 months to 6 months 2754 6 months to 1 year 2187 1 year and above 244
Comments: I assume O/S means outstanding, though I don't know why they can't just write outstanding.
Based on what I know, it seems reasonable to assume that: Claims O/S at the beginning of the period + Claims reported during the Claims Settled during the period + Claims Repudiated during the period + Claims closed during the period + Claims O/S at End of the period
LHS = 27605 + 309415 = 337020 RHS = 325468 + 33166 + 0 + 12707 = 371341
These two aren't equal, though.
371341.0/337020 = 1.1018366862500741
What am I missing?
On the plus side, at least
7522 + 2754 + 2187 + 244 = 12707.