India Health Insurance - Loss Ratios Likely To Moderate From The Elevated Q3 Levels: Motilal Oswal

Motilal Oswal Report

Considering the long-term potential, the overall health insurance industry is well poised for growth and is on track to achieve five times-eight times industry size by 2030.

We remain optimistic on the overall prospects for Star Health and Allied Insurance Company Ltd., backed by:

1. its strong growth in the retail health industry, given the under-penetration,

2. its increasing focus on tightening the underwriting standards,

3. the strong push from the banca channel, where it will underwrite benefit-based products that have a relatively better profitability,

4. the sustained growth in specialized products, and

5. its deepening presence.

We expect Star Health to report a net earned premium/profit after tax compound annual growth rate of 17%/34% during FY23-26.

We reiterate our 'Buy' rating with a target price of Rs 730 (based on 30 times FY26E earnings per share).

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