Star Health outpaces industry growth in retail segment; gains market share

Star Health and Allied Insurance Co Ltd, a standalone health insurer, continues to outpace industry growth and gain market share in the retail health segment.

The health insurance industry, including PA (personal accident), grew by 15.1 per cent in the September quarter, supported by 18 per cent growth in the group health and 17 per cent growth in the retail health segments, according to the Chennai-headquartered company.

In comparison, it recorded 22 per cent growth in its retail health segment, garnering 34 per cent market share in the segment, which is three times that of the second largest player in the industry.

“We continue to grow faster than the market rate and are increasing our retail health market share,” said Anand Roy, Managing Director, during the Q2FY23 earnings call.

During the first half of this fiscal, the company’s retail health market share stood at 33 per cent, an increase of 200 basis points over the year-ago period.

Its agency business, which grew 19 per cent in H1FY23, accounted for 82 per cent share. Premium collected through the corporate agent segment, which includes banks and other tie-ups, grew 44 per cent during the first half of this fiscal.

“We are on course to add about 80,000-100,000 agents in the current financial year. The addition of 36,000 agents in H1 took the total agency strength to 5,86,000. With improving agency productivity, we are confident of maintaining our market-leading position, he added.

The company was driving premiumisation in its product portfolio and the contribution from specialised products increased to 16.5 per cent in H1FY23. The average sum assured of new policies increased by 14 per cent year-to-year to Rs. 8.7 lakh per policy. The company has exited the large group health insurance business due to poor lifetime value. But, it would make inroads wherever the premium was adequate.

Digital sourcing, the premium collected directly from its website as well as third-party aggregators and online brokers, grew 28 per cent year-on-year in H1 of this fiscal, and accounted for 11 per cent of its overall GWP, which stood at Rs 3,189 crore in H1FY23.

During H1 of this fiscal, 81 per cent of the amount was settled through cashless mode. “In cashless, we have introduced auto adjudication of claims and this helps improve the turnaround time. The number of claims under auto adjudication rose to 33,000 in Q2, up 95 per cent over Q1FY22, said S Prakash, Managing Director.

The company is planning to effect a price hike in its flagship product Family Health Optima in this quarter to combat the structural rise in medical inflation post-Covid. “We had taken a price increase in our product Medi Classic Individual, which has started showing results in the form of lower loss ratios, he added.

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