Star Health Q4 Results: Profit Misses Estimates, Combined Ratio Improves

Star Health and Allied Insurance Co.'s fourth-quarter profit rose year-on-year, beating analyst estimates.

The private standalone health insurer reported a profit of Rs 102 crore in the quarter ended March, as against a loss of Rs 82 crore last year, according to its exchange filing. That compares with the Rs 168 crore profit estimated by analysts tracked by Bloomberg. The bottom line fell 52% sequentially.

The company earned a net premium of Rs 3,993 crore, a 15% increase over a year earlier.

• Revenue rose 11% to Rs 3,053 crore.

• The operating profit ratio was 2.46%.

• Retail health reported a segmental profit of Rs 71 crore, as compared with a loss of Rs 91 crore. Group health profit stood at Rs 4 crore, as against a loss of Rs 7 crore.

• The solvency ratio—which measures the extent to which assets cover commitments for future liabilities—rose to 2.14 from 1.67. The minimum regulatory requirement is 1.50.

• The expenses of management to net written premium ratio fell to 29.2% from 30.2%.

• The combined ratio—which is a sum total of expenses for management and claims ratio—improved to 91.4% from 98.4%. This was mainly due to a decline in the claims ratio.

“(In FY23) we focused on improving our retail market share, lowering our combined operating ratio, growing our channel partners and agent network ... Retail health insurance will remain our primary focus for the years ahead. We continue to invest heavily in enhancing our customer experience through product innovation and digitalization,” said Anand Roy, the newly appointed chief executive officer and managing director of Star Health, in an exchange filing.

Star Health has a retail health market share of 34% in the Indian general insurance industry as of March 31, 2023.

It expanded its partnership with its network growing to 14,203 hospitals across India. The company strengthened its presence to 835 branch offices pan India in FY23, according to the filing.

Shares of Star Health ended 1.16% higher on Friday after the results were announced, compared with a 0.76% rise in the benchmark Sensex.