Average Time to Settle a Claim

Average Time to Settle a Claim is the average number of days your organization takes to resolve an insurance claim, measured separately for each policy type you offer.

What is Average Time to Settle a Claim?

Average Time to Settle a Claim measures how long it takes, from the moment a claim is filed to the moment it is closed, across each policy type your organization offers. The number varies significantly by policy. Auto claims typically close faster than medical claims, which may involve multiple providers, ongoing treatment, and complex documentation.

Tracking this KPI tells you where your claims process is running smoothly and where policyholders are waiting longer than they should be.

Why Average Time to Settle a Claim matters

Settlement speed affects two things that compound over time: customer trust and operational cost.

A claim that drags on frustrates the policyholder and increases the likelihood they won't renew. It also keeps your team tied up in open files, raising the cost of each settlement. When you know your average settlement time by policy type, you can identify which lines of business are creating the most friction and act before those delays show up in your renewal numbers.

For an insurance leader, this metric is a proxy for how well your claims operation is actually running, not just how many claims you're closing.

How to calculate Average Time to Settle a Claim

Average Time to Settle a Claim = Total days to settle all claims / Number of claims settled

Calculate this separately for each policy type. Aggregating across all policies in a single number obscures the differences that matter most.

Example: If your auto claims team closed 50 claims last month and the total days across all those claims was 750, your Average Time to Settle a Claim for auto is 15 days.

750 days / 50 claims = 15 days average

If your medical claims team closed 30 claims with a combined 600 days, that line runs at 20 days average, a meaningful difference that a blended number would hide.

What affects settlement time

Several factors push settlement times up or down. Understanding them helps you diagnose a rising average before it becomes a complaint.

• Policy complexity: Medical and liability claims involve more parties, more documentation, and longer investigation periods than straightforward auto or property claims.
• Documentation requirements: Claims that require third-party verification, legal review, or specialist assessment take longer by design.
• Team capacity: When claim volume spikes and staffing doesn't, backlogs form and averages climb.
• Process bottlenecks: Handoffs between adjusters, legal, and finance are common sources of delay that don't show up until you track time at each stage.
• Fraud investigation: Claims flagged for review extend the timeline, which is appropriate, but worth separating from your standard average so you're not comparing like with unlike.

What a good benchmark looks like

Benchmarks vary by policy type and jurisdiction, so compare your numbers against your own historical trends before looking outward.

As a general reference point, auto claims in North America often settle within 30 days for straightforward cases. Medical claims routinely run longer, sometimes 60 to 90 days or more depending on treatment duration. Property claims fall somewhere in between.

The more useful question is whether your Average Time to Settle a Claim is moving in the right direction over time, and whether it differs meaningfully across adjusters, regions, or claim categories in ways that point to a fixable problem.

How to track Average Time to Settle a Claim

Spreadsheets can track this metric, but they require manual updates and make it easy to miss a trend until it's already a problem. A dashboard that pulls from your claims management system automatically keeps the number current without anyone having to go looking for it.

Klipfolio connects to the data sources your team already uses and lets you monitor Average Time to Settle a Claim alongside related metrics like Claims Settlement Ratio and Policy Renewal Rate. When your claims leaders and operations team see the same numbers in real time, they spend less time reconciling data and more time acting on it.