We aspire to become the largest health insurance player: Star Health CEO

We have been a strong player in the retail sector for years, now holding over 33 per cent market share. However, we have not been as significant in the group sector, which constitutes more than 50 per cent of the health insurance segment. Our share there is only 2 per cent. As we build our group business, we aim to close the gap with the number one player. Although we aspire to reach the top, we are not setting a specific target or timeline. We aim to continually expand Star Health insurance coverage and innovate our products and services. In FY24, New India’s GWP was ₹18,321 crore (up from ₹16,682 crore in FY23), while Star Health’s GWP was ₹15,039 crore (up from ₹12,757 crore in FY23).

Our focus in the group business is on small and medium enterprises (SMEs) rather than large corporates. We leverage our extensive network of seven lakh agents, many of whom serve SMEs. We also collaborate with large banks like Bank of Baroda and Punjab National Bank, which have a massive network of 30,000 branches and significant lending programmes for SMEs. These two segments will be the main drivers of growth in our group business.

Yes, we have initiated a cluster-based approach this year. We are targeting clusters like Tirupur and Moradabad, where specialised industries are concentrated. We have identified 25 clusters to start with and are opening offices in these areas. While insurance adoption is mature in manufacturing SMEs, we are focusing on SMEs in the services segment. For example, a restaurant owner with 20 employees would have never thought about taking health coverage for its employees. That’s the evangelizing that we are doing to these kinds of small businesses, where they would like to provide health cover for their staff. In addition to health insurance, we are also offering some value-added services such as telemedicine services and home healthcare services.

Last year, we reduced our efforts in certain markets with high incidences of fraud and abuse post-COVID. We also slowed down in the portability business to avoid mis-selling. This led to a slight dip in market share. However, we see that getting corrected this year. Our aspiration is to grow faster than the market. We expect that the market will grow in the mid-teens and we should grow closer to 18-20 per cent. Not only for this year but at least for the next four years. That’s how we will get from ₹15,000 crore plus to ₹30,000 crore by FY28. And as we do that, we hope that we will improve our market share also. Today we are at 33 per cent market share in retail. We hope that it will move to 35 per cent in the next four years’ time.

Our growth strategy involves four channels: agency, bancassurance, corporate, and digital. We are a very large player in the agency business, which will continue to muscle its way through. We are adding almost 100,000 new agents every year to our franchise. We already have 700,000 agents and we want to get to 1 million agents in the next two years’ time. This will help us increase the productivity to keep gaining market share. On the bank assurance side, we are growing very fast as most of the large public sector banks are already signed up with us. Many of the large NBFCs and HFCs are also with us. We are focusing on SMEs for corporate growth, with a dedicated team driving this effort. On the digital side, we probably have more than 50 per cent market share in the direct-to-customer space. Also, we have partnerships with players like Policy Bazaar. Star Health is one of the most searched websites. So, we get substantial organic traffic and our 2,000-odd tele-callers to follow up on the enquiries. These four growth engines will drive us from ₹15,000 crore plus to ₹30,000 crore in the next four years.

Post-COVID, there is a heightened awareness and responsibility among customers to take care of their health and that of their families. People now realize the importance of having individual health insurance plans. For example, if one changes jobs company coverage may not be there for immediate and extended families. So, that’s why they are now looking at buying individual health insurance programmes. However, we have still not touched the tip of the iceberg because the penetration levels are still very low. We have a long way to go.

We are carrying forward losses from COVID times. So, we still have some accumulated losses to be wiped out. I think by the end of this year, we would have overcome all of those accumulated losses that we have on our balance sheet. We are looking at dividends and probably from next financial year, we’ll decide on that.