Star Health Sees Strong Growth Opportunities in India’s Health Insurance Market

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In its FY23 annual report, Star Health & Allied Insurance Company (STARHEAL) outlined strong growth opportunities for health insurance in India. Since the Covid pandemic, there has been a heightened awareness among people about medical expenses, which has resulted in a rise in walk-in business from people looking for health insurance.

With India ranking high in diabetes, obesity, and cancer cases, in addition to an increasing share of older age population, the severity of hospitalization cases is likely to continue to rise. This is further driving the demand for health insurance.

STARHEAL is focusing on deepening its presence in rural India with the creation of a dedicated vertical for addressing demand from these geographies. It is also working on enhancing its bancassurance channel.


Analysts expect the company to report a 19% CAGR in overall gross premium over FY23-25, driven by a 20% CAGR in retail health and a 10% CAGR in group business. Claims ratios are likely to normalize at ~64%, with the combined ratio at ~93%. These factors should boost STARHEAL’s profitability over FY23-25, with RoE improving to 16% in FY25E from 11% in FY23.

Analysts reiterate their BUY rating on the stock with a 1-year TP of INR760 (premised on 33x FY25E EPS).

In summary:

  • India’s health insurance market is poised for strong growth, driven by increased awareness about medical expenses and a rising prevalence of chronic diseases.
  • STARHEAL is well-positioned to capitalize on this growth with its focus on deepening its presence in rural India and enhancing its bancassurance channel.
  • Analysts expect the company to report strong profitability over the next few years.

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