Earnings Review
Star Health and Allied Insurance Jul-Sept PAT down as expenses rise
This story was originally published at 21:15 IST on 29 October 2024
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--Star Health Jul-Sept net profit INR 1.11 bln vs INR 1.25 bln year ago
--Star Health Jul-Sept net premium earned INR 37.04 bln vs INR 32.06 bln
By Kshipra Petkar
MUMBAI – Star Health and Allied Insurance Co. Ltd. reported a net profit of INR 1.11 billion, lower than INR 1.25 billion reported a year ago, as expenses rose in the quarter ended September. The expenses in the reporting quarter were up by nearly 19% on year to INR 38.98 billion. Net commissions rose to INR 5.49 billion from INR 4.89 billion as reported a year ago. Employees' remuneration and welfare expenses were up at INR 4.52 billion, against INR 4.11 billion a year ago. The company's other expenses were up at INR 1.56 billion, against INR 1.35 billion a year ago.
The incurred claims paid by the health insurance company rose to INR 24.02 billion from INR 21.20 billion in the corresponding quarter a year ago. The incurred claims ratio increased to 72.79%, higher than 68.65% reported a year ago. For Apr-Sept, the net incurred claims ratio was at 70.2% as compared to 67.1% a year ago, the company said in its investor presentation.
In Jul-Sept, the only-listed standalone health insurer reported an underwriting loss of INR 1.95 billion, as compared to an underwriting loss of INR 784 million a year ago. As a result, the combined ratio, which measures the underwriting performance, increased to 102.99% from 99.20% a year ago. Combined ratio is a measure of the underwriting profit where a ratio below 100% shows underwriting profit.
On the business front, the net earned premium for the reporting quarter was at INR 37.04 billion, higher than INR 32.06 billion a year ago. Gross premium written was at INR 43.71 billion, against INR 37.32 billion a year ago. The insurer's retail health market share fell to 32% in Apr-Sept from 33% in the corresponding quarter a year ago.
The solvency ratio of the health insurance company stood at 2.24 times as on Sept. 30, above the regulatory requirement of 1.50 times.
As per the press release, the company focused on expanding its agency strength, posting strong agency business growth of 17% in fresh gross written premiums in Apr-Sept. "The agency business vertical contributed to nearly 80% of overall business in H1FY25 (Apr-Sept) with increased agency strength at ~742k agents with recruitment of ~25k agents in Q2FY25 (Jul-Sept)," the release said.
On the National Stock Exchange, shares of the health insurance company closed nearly 1% lower at INR 536.25 on Tuesday. The company announced its results post market hours. End
Edited by Manisha Baxla
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