Star Health Releases Q1 FY27 Earnings Call Transcript: Key Highlights

Star Health and Allied Insurance Company Limited delivered another strong quarter in Q1 FY27, reporting healthy premium growth, improved underwriting profitability, and higher earnings. The company’s management highlighted that its long-term strategy of disciplined underwriting, technology investments, and customer-focused distribution is producing consistent results.

During the earnings call, Managing Director & CEO Anand Roy emphasized that the company has now completed 20 years of operations and remains India’s largest retail health insurer, serving more than 2.8 crore lives.

Q1 FY27 Financial Highlights

Star Health reported strong operational and financial performance for the first quarter of FY27:

• Gross Written Premium (1/N basis): ₹4,287 crore, up 19% YoY
• Gross Written Premium (N basis): ₹4,672 crore, up 19% YoY
• Fresh Retail Health Premium: ₹730 crore, up 37% YoY
• Fresh Retail Health Premium (N basis): ₹1,039 crore, up 35% YoY
• Investment Income: ₹644 crore, up 10% YoY
• Profit After Tax (PAT): ₹550 crore, up 25% YoY
• Normalized PAT: ₹386 crore, up 44% YoY
• Annualised Return on Equity (ROE): Improved to 15.6% from 12.2% last year.

Underwriting Performance Continues to Strengthen

One of the biggest highlights of the quarter was Star Health’s continued improvement in underwriting profitability.

The company reported:

• Underwriting Profit: ₹111 crore versus ₹16 crore in Q1 FY26.
• This marks the fourth consecutive quarter of improvement.
• Combined Insurance Service Ratio (CISR) improved to 97% from 98.7% a year ago.

Management attributed the improvement to:

• Better portfolio selection
• Risk-based pricing
• Fraud detection using AI
• Better claims management
• Wellness initiatives
• Expansion of telemedicine and home healthcare services

According to management, these improvements are structural rather than temporary.

Fresh Retail Business Sees Strong Momentum

Fresh retail health insurance remained one of the biggest growth drivers.

The company reported:

• Fresh retail health premium increased 37% YoY.
• 94% of fresh retail customers were buying health insurance for the first time compared with 90% last year.

Management said the recent GST waiver has significantly improved affordability, encouraging more first-time buyers to purchase health insurance.

Focus on Profitable Growth Instead of Market Share

Although Star Health’s retail market share declined slightly from 31% to 29%, management clarified that this was intentional.

The company continues to prioritize:

• Better underwriting quality
• High-return customer segments
• Profitable geographies
• Sustainable growth instead of chasing volume

The company believes this disciplined strategy will deliver superior long-term returns.

Agency Network Crosses 8.5 Lakh Agents

Star Health continued expanding its proprietary distribution network.

Key highlights include:

• Added approximately 20,000 new agents during the quarter.
• Total agent strength reached 8.5 lakh.
• Agent productivity improved 19% YoY.
• More than 90% of retail business came through proprietary channels, including agency and digital D2C.

Management noted that fresh business growth in non-metro regions is growing 3.5 times faster than metro markets.

Digital Business Witnesses Exceptional Growth

The company’s Direct-to-Consumer (D2C) digital business remained one of the fastest-growing channels.

Highlights include:

• D2C fresh business grew 142% YoY.
• 74% of digital business originated through Star Health’s own platform.
• 98% of digital customers were first-time insurance buyers.

The company believes owning customer relationships through digital channels improves profitability and customer retention.

AI and Technology Become Competitive Advantages

Technology continues to play a central role in Star Health’s strategy.

Management highlighted that the company now possesses 20 years of proprietary health insurance data, creating a significant competitive advantage.

Current technology initiatives include:

• AI-based underwriting
• Fraud detection models
• Generative AI in claims processing
• Digital servicing
• Advanced analytics

The company’s distribution application ATOM Pro received recognition at the Economic Times BFSI FinNext Awards 2026 under the “InsurTech Product Excellence of the Year” category.

Customer Experience Continues to Improve

Star Health also reported improvements in customer satisfaction metrics.

Key customer highlights:

• Retail claim settlement ratio improved to 91%
• Renewal ratio increased to 102%
• Net Promoter Score (NPS) improved by 12 points to 65
• More than 9.5 lakh claims settled during the quarter
• Over 80% of claims processed through cashless hospital networks

The customer mobile application has now crossed:

• 16 million downloads
• 1.5 million monthly active users

Customers increasingly use the app for renewals, claim submissions, and policy servicing.

Telemedicine and Home Healthcare Reduce Claims Costs

Management believes telemedicine and home healthcare have become major contributors to better claims management.

As seasonal illnesses such as dengue and malaria rise during Q2, Star Health expects its teleconsultation services to help manage fever-related cases efficiently while reducing hospitalization costs.

The company stated that wellness programs, home healthcare, and digital consultation are contributing positively to underwriting profitability.

Expense Ratio Expected to Improve Further

The management expects technology investments to gradually improve operational efficiency.

According to CFO Nilesh Kambli, Star Health expects:

• Around 30–40 basis points improvement in expense ratio over time.
• Reinsurance costs to decline as earlier quota-share treaties phase out.
• Insurance revenue growth to gradually improve toward 15–16%.

Pricing Strategy Remains Disciplined

Management clarified that pricing actions will continue to be:

• Product-specific
• Actuarially driven
• Based on annual reviews

Instead of aggressive premium hikes, Star Health plans to implement gradual pricing adjustments while rewarding claim-free customers with discounts.

Management Outlook

Looking ahead, Star Health remains focused on three strategic priorities:

• Expanding health insurance penetration through its proprietary distribution network.
• Improving underwriting profitability using data analytics, AI, and disciplined portfolio management.
• Enhancing customer experience through digital innovation and technology.

Management reiterated that the objective is not to maximize short-term growth but to build a sustainable, profitable health insurance franchise capable of delivering mid-to-high teen Return on Equity (ROE) over the long term.