Star Health & Allied Insurance Aims for 18-20% Growth in FY 2025

Star Health & Allied Insurance Company is poised for substantial growth in the current financial year, aiming for an 18-20% increase in gross written premiums (GWP). Star Health plans to double its premium income over the next four years as a standalone health insurance company. CEO Anand Roy stated that this ambitious goal is to enhance operational efficiencies driven by technology investments and regulatory initiatives such as Cashless Everywhere and the National Health Claims Exchange.

He added that Star Health anticipates outpacing industry growth rates by 1.5 times, targeting GWP between ₹18,000 crore to ₹18,500 crore for the fiscal year. Looking ahead, the company aims to elevate its GWP to ₹30,000 crore by focusing on augmenting premium income while concurrently reducing operational costs and enhancing claims management.

Efforts to improve operational metrics are central to Star Health’s strategy. The company aims to reduce its claims ratio, which stood at 66.5% last year, by at least 50 basis points and lower its combined ratio from 96.7% to around 95.5% in the current fiscal year.

In terms of market focus, Star Health currently allocates less than 10% to group health businesses without involvement in government health schemes. This strategic decision is rooted in the company’s pursuit of profitable opportunities and avoidance of intensely competitive bidding processes prevalent in government sectors.

Looking at the retail-group business mix, Star Health currently operates with a ratio of 92% retail to 8% group business. However, the company anticipates rapid growth in the group segment, projecting potential growth exceeding 100% annually. This growth trajectory could potentially rebalance the retail-to-group ratio to around 85:15 over the next two years, while continuing to prioritise retail for its innovation potential and market responsiveness.

Speaking of the recent price adjustments in certain products, the company’s CEO stated that it reflects Star Health’s cautious approach to maintaining portfolio health amidst evolving market dynamics. Following a 12-14% price hike, the first in 15 years, the company plans another revision to align with medical inflation and other pertinent factors. These periodic adjustments are crucial for sustaining product viability and customer satisfaction.

The company’s CEO, Anand Roy, added that initiatives like the National Health Claims Exchange and Cashless Everywhere hold promise for transforming the health insurance landscape. Star Health eagerly anticipates integrating with these platforms to enhance service accessibility and offer more personalised insurance solutions. The integration of comprehensive health records promises to usher in tailored insurance products, moving away from conventional standardised offerings.

As regulatory initiatives gather momentum, Star Health remains committed to advancing its operational capabilities and market presence. It aims to bolster insurance penetration and effectively cater to evolving customer needs in the healthcare sector.

On June 18, 2024, the share price of Star Health & Allied Insurance Company Ltd opened at ₹530.55, touching the day’s high at ₹533.00, as of 10:21 AM on the NSE.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.