Star Health & Allied Insurance, India’s largest standalone health insurer, is readying to enter the life insurance space. MD & CEO Anand Roy tells Narayanan V, that the target premium for FY26 is Rs 20,000 crore. Moreover, the company will deepen its presence in Tier II and III cities. Excerpts:
What is the progress on your goal of Rs 30,000 crore in gross written premium (GWP) in FY28?
We closed the last financial year with Rs 17,500 crore in GWP, growing at around 15%. Of this, about 95% came from retail health and 5% from group health. We had earlier guided that we would double the premium to Rs 30,000 crore by FY28. To get there, we need to grow at 18% year-on-year. For the current fiscal, we have set a premium target of Rs 20,000 crore. While we have made some corrections in our corporate business, our retail plans remain on track. We are focusing on deepening our presence in Tier II and III cities and expanding our agency force and distribution network. The Rs 30,000-crore GWP goal by FY28 remains.
But health insurance premium growth remains muted…
That’s quite natural. During the pandemic, fear was high and people rushed to buy health insurance. Since then, the growth rate has tapered. That said, health remains the fastest-growing segment in the insurance industry. I believe this is a multi-decade growth opportunity. Health insurance penetration is still very low. With product launches and government initiatives like the awareness campaign from the General Insurance Council, I’m confident growth will continue. Healthcare costs are rising rapidly as more hospitals come up, medical technology advances, and care improves—but this also makes it unaffordable for many. That’s why health insurance is becoming critical. The government is focusing on providing coverage to the poor, while we are working to cater to the middle and upper-middle income segments.
How do you keep your loss ratios in check amid rising healthcare costs?
We have a network of over 15,000 hospitals, and we have pricing arrangements with almost 5,000 of them. We are trying to create a network of preferred partner hospitals so that our customers go to those hospitals. There are two benefits — first, they will get the best quality treatment, and second, there will be no unnecessary out-of-pocket expenses because these hospitals offer good pricing under our agreement.
We are also improving our technology platforms to identify abuse and fraud. And finally, if needed, we take price revisions to keep loss ratios under control—that’s the last option.
Are there any price hikes around the corner?
Last year, we repriced five of our leading products, which together account for 65% of our retail health portfolio. Medical inflation in India is the highest among developing countries, and it’s largely unchecked because there’s no dedicated regulator. I believe there needs to be some form of regulatory oversight, otherwise insurance penetration will remain low. If input costs keep rising, product pricing will also go up, because insurance premiums are directly linked to medical inflation. That said, we only consider annual price increases when a product’s loss ratio crosses a certain threshold.
What happened to your life insurance foray plan?
The Insurance Amendment Bill, 2025 is in the pipeline and is expected to be introduced soon. If that comes through, we would like to enter life insurance. In India, life insurance is largely sold as an investment or savings product—it hasn’t been positioned as a protection plan. Since we are a large protection player in retail indemnity health, we see a big opportunity there. We can look at entering the protection space with term life insurance plans, which is a natural adjacency for our customer base. So, we are exploring that. Our board has also given us the green signal to explore such options. We are now waiting for the regulations to come out—once that happens, we will take a call.