ICR Full Form in Insurance

What is the Full Form of ICR in Insurance?

The ICR Full Form in Insurance is Incurred Claim Ratio. Somehow, it is similar to the score showing how much an insurance company has given away for claims in relation to the money it takes in from people, paying premiums over a year. For example, a company having an ICR of 88% implies that if it collects Rs. 100 in premium, the company will be spending Rs. 88 to pay for the claims arising, and what is left would be around Rs. 12, which will be paid to the company for profit.

Why Is ICR Important:

Why do we care? It tells us whether an insurance company is doing well financially, whether it can pay out the money for claims. If the ICR is more than 100%, it means the company is giving more money for claims than it’s collecting from premiums. This is not good for the company since it may lose money, where it has to increase the premium or say no to some claims.

A Range of Implications:

The rule goes that ICR from 50% to 100% is usually a good sign. It shows the company is making money and handling claims well, paying out enough claims yet keeping enough money in order to stay stable and reliable. If you are shopping for insurance, a company with an ICR in this range would likely be a very good bet since it shows they are likely good at the settlement of claims.