28-Oct-2026 10:38:31
STAR HEALTH Q2 CONCALL : GWP GROWS 19%, PAT SURGES 231%; UNDERWRITING TURNS PROFITABLE, MANAGEMENT TARGETS 20%+ FRESH BUSINESS GROWTH & HIGH-TEENS ROE OVER TIME
FINANCIAL PERFORMANCE & BUSINESS DEVELOPMENTS • Q2 GROSS WRITTEN PREMIUM GREW 19% YOY TO ₹5,275 CR, WHILE H1 PREMIUM INCREASED 19% TO ₹9,562 CR ON A REPORTED 1/N BASIS • Q2 NET PROFIT SURGED 231% YOY TO ₹265 CR FROM ₹80 CR, WHILE H1 NET PROFIT GREW 57% TO ₹815 CR • Q2 NORMALISED NET PROFIT GREW 70% YOY TO ₹390 CR, WHILE H1 NORMALISED PROFIT INCREASED 56% TO ₹775 CR • Q2 UNDERWRITING PROFIT IMPROVED TO ₹99 CR FROM A LOSS OF ₹40 CR YOY, MARKING A ₹139 CR TURNAROUND • H1 UNDERWRITING PROFIT REACHED ₹210 CR AGAINST A LOSS OF ₹24 CR YOY, EXCEEDING THE ENTIRE FY26 UNDERWRITING PROFIT OF ₹198 CR • Q2 COMBINED INSURANCE SERVICE RATIO IMPROVED 290 BPS YOY TO 98%, WHILE H1 RATIO IMPROVED 240 BPS TO 97.9% • FRESH RETAIL HEALTH PREMIUM GREW 35% YOY IN Q2 & 36% DURING H1, WITH NEW-TO-INSURANCE CUSTOMERS CONTRIBUTING 93% OF FRESH BUSINESS • COMPANY ADDED 39,000 AGENTS DURING H1, TAKING ITS NETWORK TO APPROXIMATELY 8.7 LAKH AGENTS; AGENCY PRODUCTIVITY IMPROVED 19% YOY • DIGITAL DIRECT-TO-CONSUMER BUSINESS GREW 137% YOY DURING H1, WITH ITS SHARE OF FRESH BUSINESS INCREASING FROM 8% TO 13% • RETAIL CLAIM SETTLEMENT RATIO IMPROVED TO 92.4% DURING H1, WITH 22.5 LAKH CLAIMS SETTLED & 83% PROCESSED THROUGH CASHLESS SETTLEMENT MANAGEMENT GUIDANCE & OUTLOOK • MANAGEMENT ASPIRES TO SUSTAIN OVER 20% ANNUAL GROWTH IN FRESH BUSINESS OVER THE LONG TERM & MAINTAIN STRONG MOMENTUM DURING FY27 • MANAGEMENT EXPECTS H2 FY27 HEADLINE PREMIUM GROWTH TO MODERATE DUE TO A HIGHER GST-RELATED BASE FROM THE PREVIOUS YEAR • MANAGEMENT TARGETS IMPROVEMENT IN ROE FROM MID-TEENS TO HIGH-TEENS OVER TIME, SUPPORTED BY BETTER UNDERWRITING PERFORMANCE & COMBINED RATIOS • MANAGEMENT EXPECTS LOSS RATIOS TO BENEFIT FROM RISK-BASED PRICING, HEALTHIER CUSTOMER SELECTION, CLAIMS ANALYTICS & FRAUD PREVENTION; RENEWAL PORTFOLIO ALREADY OPERATES BELOW 100% COMBINED RATIO • MANAGEMENT EXPECTS OPERATING LEVERAGE, AUTOMATION & HIGHER AGENCY PRODUCTIVITY TO SUPPORT COMPLIANCE WITH PROPOSED IRDAI EXPENSE LIMITS, WHILE FINAL REGULATIONS, MEDICAL INFLATION & INVESTMENT VOLATILITY REMAIN KEY RISKS INVESTOR TAKEAWAY: POSITIVE — STRONG FRESH BUSINESS GROWTH, A ₹139 CR QUARTERLY UNDERWRITING TURNAROUND & SUB-100% COMBINED RATIOS INDICATE IMPROVING CORE PROFITABILITY. HOWEVER, SUSTAINING UNDERWRITING GAINS, MANAGING MEDICAL INFLATION & ACHIEVING HIGH-TEENS ROE REMAIN IMPORTANT MONITORABLES.
STAR HEALTH & AL INS CO L