According to the economytime, the General Insurance sector in India is poised for significant growth, with a projected annual growth rate of 14% in 2025. The industry currently represents approximately 3.8% of GDP, with aspirations to reach 4.5% by 2034 through various reforms and increased consumer awareness initiatives.
With a market capitalization of Rs 27,644.44 crore, the shares of Star Health and Allied Insurance Company Ltd were trading at Rs 470.40 per share, increased around 1.79 percent as compared to the previous closing price of Rs 462.15 apiece.
Matter Explanation
As of December 2024, a foreign institutional investor, government pension fund global bought fresh 75,46,340 equity shares representing 1.28 percent of the company.
Industry Overview
India’s health insurance sector, contributing 39% to general insurance, grew 9.6% in H1 FY’25, reaching ₹65,600 crore, driven by 11.5% growth in Group Health and 18.3% in Retail Health. Post-COVID awareness has boosted demand, with the regulator’s “insurance for all by 2047” vision supporting long-term growth.
Company Performance
Examining the company’s financial performance, revenue magnified by 17 percent from Rs 3,461 crore in Q4FY23 to Rs 4,058 crore in Q4FY24, during the same time frame, net profit shrunk by 11 percent from Rs 125 crore to Rs 111 crore.
Star Health’s GWP grew 17% in H1 FY’25, surpassing industry averages, with fresh business up 31% and policy growth at 14%. The agency channel drove 80.4% of the business, recruiting 25,000 agents in Q2. Digital business excelled, achieving a 41% rise in fresh business during H1 FY’25.
Claims Management
Claims severity rose by 10% and frequency by 6%, increasing the H1 FY’25 claims ratio to 70.2% from 67.1% in H1 FY’24, driven by seasonal illness and higher medical claims. Management aims to improve efficiency through hospital negotiations and fraud detection to mitigate elevated loss ratios.
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Management Insights
Management faces challenges in controlling loss ratios amid rising medical inflation and shifting hospitalization trends. To address this, they plan price hikes across products. Despite short-term hurdles, they remain optimistic about achieving ₹30,000 crore in GWP and tripling PAT to ₹2,500 crore by FY’28, aligning with long-term growth targets.
Strategic Focus
The company prioritizes growth across agency, banca, corporate, and digital channels while expanding its hospital network and enhancing claims processing for better customer experience. Proactive pricing adjustments are underway to address medical inflation and evolving market dynamics, aligning with its strategic focus on sustainable growth and operational excellence.
Company Profile
Star Health and Allied Insurance Company Ltd is an India-based health insurance provider. The company offers health, personal accident, and abroad trip insurance. Its product categories include health, accident, and travel insurance.
Written by:- Abhishek Singh
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