Standalone health insurer Star Health & Allied Insurance Company Ltd is devising a new growth strategy under which it seeks to grow at a CAGR of 20 per cent during this decade to deepen its focus on Bharat (rural and semi-urban locations) and strengthen schemes and coverage for out-patient department expenses.

The 16-year-old Chennai-headquartered company, which recently saw top-level rejigs, including the resignation of Founder-Chairman V Jagannathan, says Star Health is at an inflection point and the company expects to grow at a CAGR of 20 per cent during this decade. Star Health is the largest private health insurer in India, with a gross written premium of ₹12,953 crore as of FY23. It had a market share of 34% in the retail health segment and 49 per cent among standalone health insurers.

“We are optimistic about our business on account of a convergence of a number of factors: a sustained increase in the Indian population and an extensively under-penetrated rural population now beginning to seek health insurance,” Anand Roy, Managing Director and CEO, said in the company’s latest annual report.

Star Health sees the next big opportunity for growth in rural and semi-urban customers. “During the last three years, marked by the pandemic, the Indian consumer has begun to recognise the need to insure one’s health; the fact that only 30 per cent of our gross written premiums in FY23 were derived from non-urban locations indicates an extensive untapped opportunity. The concept of health insurance has been indirectly ‘marketed’ by the pandemic,” he added.

1,000 rural offices

Star Health will widen its coverage and address the growing consumer pull coming out of Bharat and has decided to invest in 1,000 rural offices across the foreseeable future, enhancing local confidence and assuring anytime support. It has 835 offices in 25 States and five Union Territories now.

The company believes that smartphone technology will make it possible for it to address the emerging opportunity in Bharat. Digital technology is expected to help replace conventional manual sales engagement, enhance speed and convenience on the one hand, and moderate sales costs on the other.

“We are excited that the company’s larger ‘Bharat’ presence will enhance our access to larger data volumes that make it possible to decode lifestyles and disease patterns, resulting in a better ability to customise products and price risk,” he added.

Cover for out-patient expenses

Apart from its plan to deepen its geographical reach, the company also seeks to widen its service breadth. Until now, Star Health has been addressing in-hospital interventions. But it believes that the time has come now to cover and focus on out-patient department expenses as well, which account for about 60% of the health costs in the country.

“Besides, this service extension will address the reality that out-patient expenses need to be incurred long after the surgical intervention, warranting insurance coverage,” said Roy.

mStar Health’s hospital network has been increasing every year, and by the end of FY23, its network had 14,862 hospitals, growing 15 per cent over the previous year.

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