Chennai-headquartered Star Health & Allied Insurance Company Limited, a leading standalone health insurance company, has set an ambitious target of growing its gross written premium (GWP) to ₹30,000 crore by FY2028 from ₹15,251 crore in FY24. More than. Additionally, the company aspires to become the largest health insurance provider by surpassing New India Insurance in the coming years. Anand Roy, MD & CEO, Star Health, discusses the company’s growth plans and the health insurance market business Line, Edited excerpts:
The gap between No. 2 player Star Health and No. 1 company New India in the health insurance sector seems to be narrowing. Will you become number one in the next few years?
We have been a strong player in the retail sector for years, now holding over 33 percent market share. However, we have not been as significant in the group sector, which contributes more than 50 per cent to the health insurance segment. Our stake there is only 2 percent. As we build our group business, we aim to reduce the gap with the number one player. Although we aspire to reach the top, we are not setting any specific goals or timeline. Our goal is to continuously expand Star Health Insurance coverage and innovate our products and services. In FY24, New India’s GWP was ₹18,321 crore (up from ₹16,682 crore in FY23), while Star Health’s GWP was ₹15,039 crore (up from ₹12,757 crore in FY23).
How are you planning to strengthen your group business in the healthcare sector?
Our focus in group business is on small and medium enterprises (SMEs) rather than large corporates. We leverage our extensive network of seven lakh agents, many of whom serve SMEs. We also cooperate with large banks like Bank of Baroda and Punjab National Bank, which have a vast network of 30,000 branches and significant loan programs for SMEs. These two segments will be the main drivers of growth in our group business.
Are there any specific strategies for growing your SME customer base?
Yes, we have started a cluster-based approach this year. We are targeting clusters like Tiruppur and Moradabad, where particular industries are concentrated. We have identified 25 clusters to begin with and are opening offices in these areas. While insurance adoption is mature in manufacturing SMEs, we focus on SMEs in the service sector. For example, a restaurant owner with 20 employees may never think about taking out health coverage for his employees. This is the promotion that we are doing for these types of small businesses, where they want to provide health cover for their employees. Apart from health insurance, we are also providing some value added services such as telemedicine services and home health services.
Last year, your retail health stock declined marginally. Will you regain share in the retail health sector going forward?
Last year, we scaled back our efforts in some markets with high incidence of fraud and abuse post-COVID. We also slowed down the portability business to avoid misselling. This led to a slight decline in market share. However, we are seeing that it is improving this year. Our aspiration is to grow faster than the market. We expect the market to grow in the mid teens and we should grow closer to 18-20 percent. Not just for this year but at least for the next four years. This way we will reach more than ₹15,000 crore to ₹30,000 crore by FY28. And as we do so, we hope to improve our market share as well. Today we have 33 percent market share in the retail sector. We hope that this will increase to 35 percent in the next four years.
What are the key strategic measures to reach ₹30,000 crore gross written premium target by 2028?
Our growth strategy includes four channels: Agency, Bancassurance, Corporate and Digital. We are a very big player in the agency business, which will continue to grow. We are adding approximately 100,000 new agents to our franchise every year. We already have 700,000 agents and we want to reach 10 lakh agents in the next two years. This will help us increase productivity to gain market share. In terms of bank assurance, we are growing very fast as most of the large public sector banks are already tied up with us. Many big NBFCs and HFCs are also with us. We are focused on SMEs for corporate growth, with a dedicated team driving this effort. On the digital side, we probably have more than 50 per cent market share in the direct-to-consumer sector. Additionally, we have partnerships with players like Policy Bazaar. Star Health is one of the most searched websites. Hence, we get ample organic traffic and we have over 2,000 tele-callers to keep track of enquiries. These four growth engines will take us from ₹15,000 crore to ₹30,000 crore in the next four years.
How do you see access to health insurance in the post-Covid phase?
Post Covid, there has been an increased awareness and responsibility among consumers to take care of their and their family’s health. People have now realized the importance of individual health insurance plans. For example, if someone changes jobs the company’s coverage may not extend to immediate and extended families. Therefore, they are now considering purchasing individual health insurance programs. However, we have not yet touched the tip of the iceberg as the level of penetration is still very low. We have a long way to go.
When will you start paying dividends?
We are carrying forward the damage caused by the Covid period. Therefore, we still have some accumulated losses to erase. I think by the end of this year we will recover from all the accumulated losses on our balance sheet. We are considering dividend and probably from the next financial year we will take a decision on it.
