Star Health and Allied Insurance Company (STARHEALTH) Q2 24/25 earnings summary

Executive summary

• Health insurance sector in India is experiencing robust growth, driven by increased awareness post-COVID, technology adoption, and regulatory support for universal coverage by 2047.

• Achieved 32% retail health insurance market share, maintaining leadership in the segment.

• The company outperformed industry growth with a 17.5% increase in overall GWP and 31% fresh growth in H1 FY25, supported by strong agency and digital channels.

• Expanded agent network to 742,000 and branch network to 902 locations; digital premium collection reached 71% of retail health GWP.

• Unaudited standalone financial results for the quarter and half year ended September 30, 2024, were approved by the Board and reviewed by joint statutory auditors.

Financial highlights

• H1 FY25 profit after tax was INR 430 crores, up 4% year-over-year; annualized ROE stood at 6.5%.

• GWP for H1 FY25 increased 17.5% year-over-year to INR 7,847 crores; investment income was INR 650 crores.

• Combined ratio for H1 FY25 was 101.1% (vs 98.4% H1 FY24); claims ratio rose to 70.2% (vs 67.1%), and expense ratio was 30.8% (vs 31.4%).

• Q2 FY25 profit after tax was INR 111 crores (vs INR 125 crores Q2 FY24); operating profit and EPS declined sequentially.

• Investment assets grew by 17.2% to INR 16,431 crores; investment yield was 8.8% in Q2 FY25.

Outlook and guidance

• Management maintains a target of INR 18,000 crores GWP for FY25 and aspires to reach INR 30,000 crores and triple PAT by FY28.

• Price hikes are being implemented across 50%-60% of the product portfolio to address elevated loss ratios and medical inflation.

• Continued focus on digital growth, alternate distribution channels, and specialized product suite.

• Combined ratio improvement target for FY25 is challenged by higher claims, but OpEx control remains strong; medium-term guidance for doubling GWP and tripling profit by FY28 is reiterated.

• Results are not indicative of full-year performance due to seasonality; higher claims are typical during monsoon, while premium income peaks at year-end.