Star Health, the country’s largest standalone health insurer, is rapidly losing market share in the $14-billion-a-year health insurance market amid rising competition from new entrants and general insurers shifting focus from the motor to the health segment.
Gross premiums of the health insurer as a percentage of total premium collection of standalone health insurers (SAHIs) fell to 44% in FY25, against 60% in FY21. The decline came even as SAHI’s industry premiums more than doubled to Rs 37,529 crore during this period.
Star Health’s share slipped further to 40% in the first four months of the current fiscal.
Industry experts attribute the erosion to new players entering the standalone segment in the last 3–4 years. Niva Bupa, Galaxy Health and Narayana Health have aggressively expanded in the retail space, long dominated by Star Health. Existing rivals have also gained ground. Care Health, for instance, tripled its premium base to Rs 8,135.35 crore and lifted its share from 15% in FY21 to 22% in FY25.
Betting on Retail Health for Growth
Star Health’s tilt towards retail health over group health (employer-employee insurance) has also contributed to its shrinking share in the SAHI universe. While 93% of its premium comes from retail, rivals such as Niva Bupa and Care Health derive around 60% from this segment.
At the industry level, retail made up 40% of the Rs 1.18-lakh-crore health insurance premium in FY25, with group health — covering employer-employee policies and government schemes — accounting for 60%.
Star Health managing director and CEO Anand Roy acknowledged that the company’s lower presence in group health has weighed on its overall share. “We are actually growing our share in the retail space, but on the group side, we are a little behind,” Roy told FE in an interaction.
The tilt is deliberate. Retail health insurance is relatively more profitable than group business, where the absence of caps on pre-existing diseases or exclusions often makes it loss-making.
Despite the pressure, Star Health remains the retail leader, commanding over a third of the Rs 47,291.27-crore market in FY25. The company closed the year with Rs 17,500 crore in gross written premium (GWP), 95% of it from retail, and has set a target of Rs 30,000 crore by FY28. Achieving this will lift its overall market share from 33% to 36%.
“By FY28, which we consider our mid-term horizon, we expect a 90:10 mix— 90% retail and 10% group,” Roy said. “In group insurance, we have chosen to focus on SMEs, rather than large corporates.”
Industry Shifts Intensify Competition
The slowdown in new vehicle sales and the absence of price hikes in motor third-party insurance have also pushed general insurers to double down on health, which has become the largest non-life segment. In FY21, motor held the biggest share of the industry’s Rs 1.99 lakh-crore premium while health accounted for 29%. By FY22, health overtook motor with 33%. At present, it contributes around 40%, prompting both PSUs and private insurers to expand presence.
Consequently, Star Health’s share in the overall health insurance market —including both standalone and general insurers — has dropped to 11% from 16% in FY21.