Star Health and Allied Insurance Company Limited

Star Health continues to dominate the retail health segment with a 31.3% market share for 9M FY26. The segment grew at 33.6% in Q3 FY26, significantly outperforming the overall non-life industry growth of 11.5%. This growth was driven by a 45% increase in fresh business and a 17% growth in renewal premiums, supported by a structural catalyst in the form of GST exemptions on retail health.

The company has achieved significant digital scale, with 94% of new policies now originating digitally and 76% of premiums collected through digital routes. The ATOM distribution app facilitated 85% of fresh policy acquisitions in Q3. Furthermore, an AI-powered claims platform now handles 57% of claims traffic, contributing to better productivity and a reduction in Fraud, Waste, and Abuse (FWA).

There is a clear management push towards long-term policies, which now account for 51% of fresh GWP compared to 34% in the previous year. These policies are viewed as a 'win-win' as they protect consumers from price hikes while improving capital efficiency and customer lock-in for the company. Additionally, the average sum-assured for the retail book (excluding group) remains healthy, reflecting a focus on higher-ticket-size products.

The combined ratio improved to 98.9% in Q3 FY26, driven by a 301 bps decline in the loss ratio to 68.8%. Management attributed this to targeted underwriting, pricing corrections, and corrective actions in the claims management side. The retail loss ratio specifically improved by 103 bps YoY to 68.4%, while the expense ratio also saw a marginal decline to 30.1%.

Star Health reported an investment yield of 9.6% for 9M FY26. The investment book is strategically diversified, with 18.7% in high-yielding assets including equities, REITs, and InvITs. Management has capped equity exposure at 15% and is operating near the 3% regulatory cap for REITs/InvITs. They expect long-term equity returns to correlate with nominal GDP growth at 10-11%.