Star Health & Allied Insurance Company - Leader In Retail Health

Conference Call Notes- Star Health Insurance-Q4FY2023-24

Profitability: We have achieved underwriting profit of ₹204 crore with a combined ratio of 95.3% and an overall PAT of ₹619 crore, which is the highest in our history.

FY2023-24 will be one full year with price increase that we have taken, we should return to healthy ROEs of 16% to 18%. Once we implement IFRS where the cost is deferred over the policy period (today only the premium is deferred as the cost is upfront), ROE will improve by 300-400 basis points.

Risk-based solvency will ensure that the solvency for us will be very, very comfortable (mostly because of granularity and growth). If risk-based solvency comes, we will be in a position to pay dividend as well.

Combined and Loss ratio: Combined ratio for FY2023 has improved to 95.3% versus 117.9% in FY2022. For Q4 FY2023, we have achieved a combined ratio of 91.3%. Loss ratios for April 2023 is also better than the previous year. We will improve the loss ratio compared to full last year number. (I am not sure how they can be sure about this? What if there is another Covid wave or some other health emergency?)

Expense ratio has improved despite a significant cutback in the group business which has a lesser expense ratio.

Revenue and market Share:
For 12 months, FY2023, our retail health has grown by close to 18% versus the industry’s retail health growth of 15.3%. i.e. 1.17 times the industry growth rate despite a very large base.

For FY2023, our retail market share is 34% against 33% of the last financial year, which is 3 times the second largest player in the industry. Star Health has registered close to 40% retail health accretion market share in FY2023

We continue to aspire to grow higher than the market growth rate and increase our retail health market share every year.

We have also made a very strong start to the new financial year in FY2024 as we speak up to the date, our premium growth for the month is more than 27% and we expect to close this month with around 25% growth.

Group Business: Group business strategy of running down the book was up to the last financial year. We have continued to focus on profitable group business, which is largely the SME segment and so the growth is coming back in group business. This is a quasi-retail model (he probably meant SME segment).

Investment assets have grown to ₹13,392 crore in FY2023 versus ₹11,373 crore in FY2022. for FY23, investment income grew to ₹835 crore versus ₹793 crore for FY2022.

Portfolio yield for Q4 FY2023 rose to 7.34% versus 6.71% of Q4 FY2022. We continue to invest in equity portfolios through ETFs. 4.1% of the portfolio is in ETF, we have decided to increase this upto 7%.

Agency business continues to contribute around 82% of the overall business. Our agency strength has increased to 6,25,860 agents. For the full year FY2023, we have added approximately 76,000 new agents over the previous year.

Digital sourcing from our web sales and tele-sales models has grown by 28% in FY 2023 to ₹625 crore for the over the previous. Our app downloads have reached 2 million downloads

We tied up with some leading banks namely Standard Chartered Bank, India Post Payments Bank and ESAF Small Finance Bank for distribution. Premium contributed from this channel has grown by 43% during the year. EoM regulations as well as the opening up of Banca business to 9 players will help us to get into newer channels and continue to grow our profitable mix of business.

Revenue drivers:
The average sum assured of new policies has increased by 13% on a year-on-year basis to ₹9 lakh per policy. ₹5 lakh sum assured and above now constitute 70% of the health insurance portfolio which was 64% in the last financial year. FY2023, growth 50% contribution by volume and by value. We had grown by 18% in retail health business. 9% is policy growth and 9% is value. For FY2023-24, around 55% to 60% growth in revenue will be achieved through price hikes (value) and 40% to 45% by volume growth.

Four pronged strategy- a) prudent claims settlement based on our rich medical expertise, b) volume based pricing arrangement with our network hospitals, c) technology enabled, fraud detection and mitigation and d) risk based pricing through micro segmentation of portfolio.

73% of number of paid claims in the financial year 2023 are through cashless versus 63% in the previous financial year.

With Anti-fraud detection, there is a 1.3% incremental benefit in terms of lower claims ratio in FY2023 versus FY2022.

Miscellaneous bits-
We are launching a new Wellness proposition for our customers as well as non-customers who will benefit from our telemedicine expertise and also earn rewards from leading healthy lifestyles. This will lead to ‘leads’ for prospective customers.

We get around 200 plus applications from different hospitals for admission in agreed network. Our empaneled hospitals have crossed 14,000 and there is a constant effort to convert most of these empaneled hospitals into our agreed pricing. There is an exclusive team in Star to talk to hospitals and arrive at a fare pricing for identifying surgical procedures and also to fit a proper price for medical management, room rents, professional charges, common diagnostic tests and all that.

about 2.5% of our policies are coming from long term plans. on the online platform or digital channels, almost 50% of our new customers in the recent past is coming from long-term plans. So, we will be focusing on these plans going forward.

Disc- Invested


Do anyone know recent buyers and sellers of block deal happened on 26th May?

From the Investor call and brokerage reports, I figured they are basing it on the increase in group revenue and the hike in the FHO plan.

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Conference Call Note - Star Health Insurance - Q1FY24

Industry Overview :

  • In Q1FY24 Health Industry including Personal Accidental growth Rate is 21% Driven by 23% growth from group Health and 18% growth in Retail Health.

Company Overview :

  • In Q1FY24 company grows at 20% .
  • In Retail insurance at 19% Where industry growth rate is 18% During Q1.

Market Share Overview :

  • Company has register 32% market share in Retail Health.
  • 2nd largest Player in the Industry.
  • Company will grow higher than the industry growth rate and increasing market share in Retail health insurance.
  • Company has register 33% accretion Market share.

Company agencies :

  • Agencies business continue to contribute 81% of the overall business.
  • Company agencies strength has increased to 642588 Agents with ,
  • The net Addition of 16728 Agents in Q1FY24.
  • In Q1FY24 our corporate agent that is bank & other tie-ups continue to remain strong & the premium has been grown by 35% from this channel .

Key Highlights :

  • Company has taken Price hike in the family health plan where the renewal pricing effective from 1 may 2023.
  • In term of volume & value are in line in our expectation.
  • The average sum assured of new policies has been increased by 10% on YoY basis now stand with 9.5lakh on average 5lakh & above sum assured now constitute 76% of retail health portfolio verses 69% in Q1FY23.
  • Retail health premium growth likely to be strong at 15% + YoY.
  • Expense Ratio to increase QoQ but decline YoY as share of retail business continue to grow .
  • Claim ratio to increase a growth in absolute claim amount exceeds growth in NEP.
  • Combined ratio to be under pressure due to higher loss and exp ratio.
  • We are tied up with AU small finance bank , Bank of Maharashtra & Godrej Housing finance . It will expand our further reach & also strengthen sales .

Digital Initiative :

  • Company continue to focus on there digital initiative & company is investing in Digital Area.
  • The digital initiative grown at 22% in QFY24 compared to last year.
  • Company has relaunched the star health application .
  • The key feature of star health differentiate the journey of policy & non policy holder instant & schedule call with our free telemate services which we called as talk to star.
  • The network hospital search has we made simple for customer to access the nearest network hospital to them.
  • The organic traffic grow from website has grown 48% in Q1FY24 same period last year.
  • The Dynamic QR Code introduce to all our policy renewal & also on the digital platform company will ensure customer can renew the policy in few clicks of button .
  • It also lead to cost savings in terms of collection cost.

New Geography :

  • In order to reach new geography company has identified almost 1000 sales manger agents which are located in semi urban & rural areas these are small individual service centres . In which 410 agents are in operational in this Quarter.

Lower claims and commissions drive improvement in combined ratio :

  • The combined ratio improved 44 bps yoy to 97.8% in 1QFY24, driven by a moderation in the claims ratio and commissions. Operating expenses were up 27% yoy (higher than GWP growth of 20%), with a moderating effect on the combined ratio and profitability.
  • Operating expense growth was elevated at 27%, driven by higher employee expenses (up 29% yoy). Management highlighted that employee expenses were high due to:
    (1) salary increment implemented in 1QFY24 and
    (2) new IT team of 30 hired for building the IT infrastructure
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To add my two cents -

Star Health insurance is also available to PNB customers (Insurance – Punjab National Bank). I recently went to a nearby branch of PNB, in Delhi, and workers over there were evangelizing it.

However, it appears that Star Health lags behind its competitors such as Niva Bupa, HDFC Ergo, and ICICI Lombard. The company has received negative reviews due to its poor claim ratio, especially during the challenging times of the Covid pandemic. These factors have contributed to a lower rating for Star Health insurance.

While it remains a viable business, it is clear that Star Health needs to take steps to improve its performance and enhance its offerings to compete effectively in the market.

I studied the market and performed a few scuttlebutts, it is evident that Star Health stands out as one of the most cost-effective and reputable brands in the industry. Star Health’s decision to offer affordable sum insured options such as 2L, 3L, and 4L is a positive step in the market. By providing budget-friendly options, the company aims to make health insurance accessible to a broader segment of the population. This strategy not only enhances their competitiveness but also demonstrates their commitment to catering to the diverse needs of customers.

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Recently they stopped giving commission to Young Star product on new as well as renewal policies to retail agents. Also Family Health Optima having sum assured 5 lakhs and less they have stopped or reduced the commission on both new as well as renewal. For retail agents this is a big shock as they have to give service to these clients inspite of getting zero commission and retail constitutes 81% business.
They are rejecting claims ad-hoc citing a very arrogant reason like" No requirement of hospital admission" as if they are the specialist doctors. And if same claims are again pursued and put up, then passing at least 50% of such previously rejected claims…Something is seriously wrong with Star Health.


and one more thing, one very funny thing has happened…One can check from their premium chart…Their normal Floater policy premium has increased so much that now its higher than their premium product Comprehensive for same sum assured. Meaning lower product is charging higher premium than premium product…


We have star health insurance

15 lakhs two policy medclaim

Once you cannot trust HDFC , other players but you can trust star health

My dad is liver transplant patient

Before in 3 or 4 years my dad has gone many times to hospital

Star every time has fulfilled cashless claim

Just you need to call in Chennai

After transplant my dad policy amount was not increased but still after transplant also they are providing great services when cashless mediclaim needed

To my childhood to till now , we started 1 lakh policy first as middle class family

And then increased over years as my dad came to know about importance of mediclaim

In my jaundice / wbc low count , to my sister disease and dad hard times , Star health is always side in our life

We never tried to scam star it just my dad had liver transplant so it occurred multiple times to admit when required

According to me , star health is best and I m biased

Star in my watchlist but did not invested due to volatility of stock 22 and missed to buy in Lower levels


Any thoughts on why the stock is lamenting since IPO?


FII’s have been reducing their stake till last quarter. In the latest quarter, they have increased their stake.

As per the latest financial report, Combined ratio of the company is increasing which is concerning.

PAT is increasing at modest rate.

Lower than expected growth and higher than expected combined ratio could be the reason for the downfall and sideways trend.

Source: HSIE results daily

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Thnx. Exited the stock as I could not see possibility of any near term tailwinds.

Investors are very anxious on why Star Health share price is on loop .I beleive Star Health is decently valued . Indian market does not have any standalone health insurer listed but few M&A deal will give idea about Star health’s valuation. At close of FY23 Start Health had gross premium of little less than 13000 Cr and current Market Cap at 33,000 Cr. Trading at a valuation multiple of 2.5 times of Gross Weighted Premium

  1. In Sept -2023 ,Private equity firm True North has sold a 20 per cent stake in Niva Bupa, a leading Indian health insurance company, to its joint venture partner, Bupa of the UK, for around Rs 2,700 crore—taking the Indian company’s valuation to Rs 13,500 crore. In FY23 , Niva Bupa became the third-largest retail health insurer, achieving more than Rs 4,000 crore in gross written premium (GWP) Deal implied a valuation of 3.3 times of FY23 GWP.
  2. Apollo Munich got a valuation of 1.2 times of FY19 premium while merging with HDFC. Apollo Munich valued at 2650 Cr . Market share was 8% in standalone health insurance.
  3. Max Bupa merged with True North at Feb-2019 .Valuation fixed at 1000Cr. On FY19 total premium collected at 660 Cr. So multiple is 1.5 times.
  4. In US market , pure play health insurer ,Cigna market cap of 97 billion USD and PE of 18. United Health Group trades at 24 PE. Grows slow.

Company is losing market share to its peers.

Thanks for the acquisition data.
One question…Why Apollo Munich and Max Bupa got sold for 1.2 and 1.5 times it gross premium ? Then how can one assume that the current 2.5 times valuation for Start Health is fair valuation just because the market share is 30% which is also decreasing a bit recently?