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No claim bonus (NCB)

A certain percentage is given as bonus for every claim free renewal year
with a limit to the maximum bonus that can be availed. It is allowed by way
of deduction on the total premium at renewal only, depending upon the
incurred claim ratio for the entire group.
No claim bonus is a powerful strategy to improve underwriting
experience and forms an integral part of rating systems. This bonus
recognises the factor of moral hazard in the insured. It rewards the insured
for not lodging claims either by adopting better driving skills as in motor
insurance or taking better care of his health as in mediclaim policies.