Tag: Star Health Insurance

Star Health expands to GIFT City, plans NRI focused insurance policies

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Star Health and Allied Insurance Company (Star Health Insurance), the largest retail health insurance firm in India, said it has been granted registration by IFSCA to establish an IFSC International Office (IIO) at Gujarat International Finance Tec-City (GIFT City).

The company plans to commence its operations with a branch in GIFT City by the end of March 2024.

Star Health Insurance’s presence in GIFT City’s International Financial Services Centre (IFSC), will enable the company to expand its global reach and business. The company will offer non-resident Indian (NRI) focused insurance that caters to the needs of the global Indian, the insurer said.

Star Health Insurance will also be able to attract foreign inward business as a reinsurer.

The company said it will provide insurance for Indians going abroad and India’s growing international student community.

The company plans to launch its international insurance product suite in a phased manner in FY25.

GIFT City is a project of national importance and has become an integral part of India’s growth story.

As of December 31, 2023, Star Health has 877 branch offices pan-India.

The company has 14,203 network hospitals pan India. In FY23, Star Health had a gross written premium of ₹12,952 crore and a net worth of ₹5,430 crore.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Health insurance industry expands market share, yet concerns arise for Star Health Insurance

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Star Health Insurance, the largest standalone health insurance company, has experienced a significant decline in market share compared to its peers in the standalone health insurance sector. At the end of March 2022, Star Health Insurance held approximately 55% of the standalone health insurance market, but this figure dropped to 49% by March 2023 and further declined to 45% by February 2024.

This decline represents a nearly 1,000 basis points (BPS) or 10% reduction in market share over the past two years (March 2022-February 2024).

The decrease in Star Health Insurance’s market share comes at a time when the standalone health insurance industry, as a whole, has seen an increase in market share compared to general insurance players.

Over the same two-year period, the Standalone Health Insurance Industry (SAHI) gained a market share of 148 bps from the general insurance industry.

Within the standalone health insurance space, several companies have experienced gains in market share.

Niva Bupa Health Insurance saw an increase of 355 bps or 3.55%, Aditya Birla Health Insurance gained 270 bps or 2.7%, Care Health Insurance gained 260 bps or 2.6%, and Care Health gained 50 BPS or 0.5%.

Analysing the trend over the past year (March 2023-February 2024), all standalone health insurance companies except Star Health Insurance saw an increase in market share.

Star Health Insurance lost 400 bps or 4% of its market share during this period, while the standalone health insurance industry gained 73 bps.

Specifically, Niva Bupa Health gained 149 bps, Aditya Birla Health gained 74 bps, Care Health gained 161 bps, and ManipalCigna Health gained 4 bps in market share between March 2023 and February 2024.

In earlier interactions with CNBC-TV18, Star Health Insurance has maintained that the company’s focus has been on growing its individual business and exiting the group business, which has led to increasing loss ratios for health insurance companies.

Analysts who track the sector agree with this strategy.

However, the question remains whether Star Health is gaining share in the retail category.

Looking at the data, Star Health Insurance has lost market share of 540 bps or 5.4% between February 2022 and February 2024.

During the same period, the Standalone Health Insurance Industry gained market share of 554 bps or 5.54%.

Additionally, Care Health Insurance gained market share by 246 bps or 2.46%, and Niva Bupa Health gained market share by 243 bps or 2.43%.

A similar trend is observed when examining the data for the last year alone.

Star Health Insurance lost market share of 350 bps or 3.5% between February 2023 and 2024, while the Standalone Health Insurance Industry gained market share of 220 bps or 2.2%.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Star Health Insurance plans to foray into life insurance biz — composite license proposal to be taken in Budget 2023

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Star Health Insurance is planning to foray into life insurance business with focus on protection products. For the same, the health insurance firm is likely to apply to Insurance Regulatory and Development Authority of India (IRDAI) for composite insurance license. Once approval is given, the firm will be able to look at creating complimentary product offering, sources informed CNBC-TV18.

Currently, Star Health Insurance operates in the standalone health insurance business.

CNBC-TV18 has written to Star Health Insurance on the same. The response from the company is awaited.

Notably, the government has recently floated consultation paper on the issuance of composite insurance license. This would allow life insurers to enter general insurance market and vice versa. This proposal is likely to be taken up in Parliament this Budget session.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Star Health launches ‘Out Patient Care’ insurance policy — Key things to know

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Star Health and Allied Insurance Co. Ltd has recently launched the new ‘Star Out Patient Care Insurance Policy’. This policy aims at providing complete health and wellness benefit to customers at an affordable cost, with an entirely digital claims processing journey, the company said in a statement.

Today in India more than 60 percent of all health care costs are related to outpatient expenses which includes doctor consultation charges, medicines bills and lab tests. But most health insurance products address expenses only related to in-patient hospitalization leaving the customer and his family uncovered for their day to day health care expenditure. Star Out Patient Care Insurance Policy was launched to bridge this gap in health cover, the company said.

“Star Out Patient Care Insurance Policy is a standalone cover aimed at the overall well-being of the customer by providing access to the best Doctors, Clinics and Diagnostic Centers pan India. Once purchased, the customer can avail unlimited virtual tele-consultations, unlimited in-clinic consultation, pharmacy expenses and diagnostic tests up to the sum insured in any of the networked facilities on a cashless basis,” it said.

The customer can buy the policy on an individual or floater basis and can cover up to 6 family members. The minimum entry age for adults is between 18 years to 50 years and for dependent children, from 31 days to 25 years.

Speaking on the policy, Vikas Sharma, Executive Director, Star Health and Allied Insurance Co. Ltd. said, “Medical inflation has increased costs of all treatments. Today, outpatient care like consultation charges, medicine bills and diagnostics tests come at a significant cost. In most cases, these are essential treatments that a person can’t do without. Over time, this builds up to a huge cost burden for people. Star Out Patient Care Insurance Policy aims to cater to every segment of the society by providing a much-needed health cover for outpatient expenses.”

Customers can opt for any of the sum insured (SI) options available that offer a cover of Rs 25,000/- Rs 50,000/-, Rs 75,000 and Rs 1,00,000/, for a policy term of 1 year.

This policy also covers pre-existing diseases after a waiting period of 1, 2 and 4 years in the Platinum, Gold and Silver plans respectively.

At the time of renewal, customers are eligible for a discount of 25 percent on premium after every block of two continuous claim free years.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Haven’t sold any shares in Star Health IPO, have full confidence in management: Rakesh Jhunjhunwala

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Shares of Star Health and Allied Insurance Company made a tepid debut at the exchanges on Friday. Backed by billionaire investor Rakesh Jhunjhunwala, the stock listed at a 6 percent discount over its issue price of Rs 900. On the NSE platform, the scrip opened at Rs 845; while on BSE, it started trading at Rs 848.80.

The ace investor told CNBCTV-18 that even though near-term factors do affect the perception of valuation, he has full confidence in the management of Star Health and thus have not sold any shares in the IPO of Star Health insurance.

“Health insurance is a nascent industry in India and star health has a 31 percent market share in retail health insurance. I invested in Star Health 30 months ago and industry dominance is one of the reasons I never sold any shares in the IPO,” Jhunjhunwala told CNBCTV-18.

Also Read: Rakesh Jhunjhunwala-backed Star Health makes weak market debut, shares list at 6% discount to issue price

The country’s largest private health insurer cut the size of its IPO to Rs 6,400 crore from Rs 7,249 crore earlier after a subdued response to the IPO last week.

“It was not a very intensely bid process but it was an intensely complicated process because there was a dispute between the promoters who wanted to sell to us. And it took 18 months for us to complete the transaction. If I would have listened to the lawyers, I would have never completed it. The growth without profitability has no purpose. So the essential idea is to have profit. COVID is once in a lifetime situation, I don’t think it is going to occur again, in my opinion, it’s all dead except the noise,” he added.

Read More: Rakesh Jhunjhunwala-backed Metro Brands IPO opens today: Should you subscribe to the issue?

“There is a good succession plan in place in the company and there is hope it will do well in future and hence I have retained my stake in Star Health.”

However, Rakesh Jhunjhunwala said that he is not participating in any public issues. “I am not participating in any of the public issues, so it makes no difference to me and the merchant bankers are the ones who are advising the valuations.”

He also remains bullish on the equity market. “I think we’ll see a positive market next year also,” said Jhunjhunwala.

For the full interview, watch the accompanying video.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Star Health IPO subscribed 79% on Day 3, retail portion booked 1.1 times

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The initial public offering of Rakesh Jhunjhunwala-backed Star Health and Allied Insurance Company was subscribed 79 percent on December 2, the third and final day of bidding. The offer received bids for 3.6 crore equity shares against the IPO size of 4.5 crore equity shares.

The portion reserved for retail investors was subscribed 1.1 times, and that for non-institutional subscribers 19 percent. Qualified institutional buyers subscribed to one times of their reserved portion.

Star Health is a Chennai-based insurance company, backed by the Big Bull and PE firm West Bridge Capital. The IPO is estimated at Rs 7,249 crore, including an offer for sale worth over Rs 5,200 crore and a fresh issue of Rs 2,000 crore.

Also Read | Anand Rathi Wealth IPO subscribed 60% so far on Day 1

The price band for the offer was Rs 870-900 apiece. Brokerages recommended subscribing to the IPO, but with caution. Choice Broking said that at the upper end of the price band, Star Health is demanding a market cap to the net premium earned multiple of 10.3 times, which sits at a premium as compared to the peers. Moreover, the brokerage said, “the demanded valuation is at an elevated premium to recent capital issuance.”

Angel One, on the other hand, recommended subscribing to the issue as the company stands out among other standalone health insurers. It said the size and growth rate of the firm is better than peers. It also has a better operational performance, which was reflected in the pre-COVID numbers of the company, it said.

“The valuations commanded by Star Health at around 5.5 times FY21 MCAP/GWP are in-line with recent deals in the standalone health insurance space and appear fair considering its positioning,” Angel One said.

Stay tuned for the latest IPO and stock market updates

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Rakesh Jhunjhunwala-backed Star Health’s IPO subscribed 20% on Day 2

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Ace investor Rakesh Jhunjhunwala-backed Star Health’s initial public offering (IPO) was subscribed 20 percent on Wednesday, the second day of the bidding process. The IPO of Chennai-based insurance company Star Health, backed by Jhunjhunwala and PE firm Westbridge Capital, is estimated at Rs 7,249 crore, including fresh issuance of Rs 2,000 crore and an offer for sale (OFS) of equity worth Rs 5,249 crore.

At the end of the day, Star Health and Allied Insurance Company’s IPO received bids for 89.7 lakh shares as against the total 4.5 crore shares on offer, a subscription of 20 percent.

The category for retail investors was subscribed 89 percent and that for qualified institutional buyers (QIBs) seven percent. The portion reserved for non-institutional investors portion was booked two percent.

ALSO READ: Should you subscribe to Rakesh Jhunjhunwala-backed Star Health’s IPO?

Out of the Star Health issue, a portion of 75 percent is reserved for qualified institutional buyers (QIBs), 15 percent for non-institutional investors and 10 percent for retail investors. The public offer includes a reservation of shares worth Rs 100 crore for employees.

The Star Health IPO was subscribed 12 percent on Wednesday, the first day of bidding.

Potential investors can bid for Star Health shares in the price band of Rs 870-900 in multiples of 16 under the IPO. At the upper end of the IPO price band, one lot is worth Rs 14,400.

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Star Health and Allied Insurance’s IPO will close for subscription on Thursday, December 2. Star Health shares will likely be listed on bourses BSE and NSE on December 10.

Check out the complete list of India’s biggest IPOs of all time

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Health insurance penetration can’t be more than 5-6%: Star Health & Allied Insurance

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Star Health’s Rs 7,250 crore initial public offering (IPO) opens for subscription on November 30. Venkatasamy Jagannathan, Chairman and CEO of Star Health and Allied Insurance Company, discussed the issue details and the outlook.

“Total penetration in the health insurance space cannot be more than 5-6 percent,” he said.

He believes that insurance is an eye-to-eye contact and the business is slowly catching up.

“A few years back, our average policy was Rs 3 lakh, today the highest range of policy is Rs 1 crore and our average policy must be around Rs 10 to 12 lakhs. So, the concept is slowly getting into everybody’s mind that they should be insured and the results can be seen maybe in two to three years,” he explained.

The very idea of starting the company was to cut into the middle-income group because India has got a large chunk of this population, he said.

“We have around 777 branches, 562 offices, 10,000 employees, around five lakh agents, and wherever you see, we have representatives working there. That is the growth, which we have achieved,” he said.

Also Read: Rakesh Jhunjhunwala-backed Star Health’s IPO subscribed 5% so far on Day 1

“We have branches from Jammu to Kanyakumari,” he added.

In terms of business, he explained, “There are two segments – one is group, one is retail. In group, except SME sector, the high corporate groups are loss- making. So, we avoid big corporate groups unless they are also giving us a good return. Most of our concentration is the SME sector and small business and our percentage of participation in that is around 13 percent whereas in market we are doing around 27 percent growth on such a large base.”

For the full interview, watch the accompanying video.

Catch all market updates here.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow