Star Health and Allied Insurance Co is looking to report maiden profits by the end of this fiscal. The 10-year-old private health insurer is targeting ‘under-writing profits’ of around Rs 100 crore by this fiscal-end.

Underwriting profit is a term used in the insurance industry and consists of earned premium remaining after losses have been paid and deduction of administrative expenses. It does not include any investment income earned on held premiums.

According to Anand Roy, Senior Vice President, Marketing and Sales, Star Health, the company has already reported profits for the first half of this fiscal.

“We hope to report under-writing profits to the tune of Rs 100 crore by March this year. This will be the first year of profits for us,” he said during a media interaction.

The company, claims to be the largest private health insurer in the country will a gross written premium of Rs 1,470 crore in FY-15.

It is looking at a 36 per cent jump in premium collections to the tune of Rs 2,000 crore by end of this fiscal.

Star Health currently has 24 products covering health, personal accident and travel segments. It has also applied to the Insurance Regulatory And Development Authority of India (IRDAI) – regulatory body – seeking clearances for two tweaked offerings to its existing portfolio.

It has a settlement ratio of 93 per cent (out of every 100 claims made, 93 are settled); with a focus largely of retail insurance. Retail insurance accounts for 95 per cent of its business, with the remaining five per cent coming from corporates.

Fund raising

According to Roy, the company is also planning to raise Rs 300 crore by placing fresh share with a private equity investor. The fund raising is expected to be complete by FY-16.

“By March 2016 we should decided on the private investor. Around Rs 300 crore may be raised,” he said. The company had recently raised Rs 80 crore though a rights issue.

 

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