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Informist, Monday, Oct. 27, 2025

By Akshat Saksena

MUMBAI – Star Health and Allied Insurance Co. Ltd. is expected to post a significant fall in its net profit due to sluggish business growth as well as a decline in the company's investment income. The second quarter results are also expected to be weaker sequentially due to seasonality, according to brokerages.

The health insurer is expected to report a net profit of INR 878.25 million in the September quarter, down 21% on year and down nearly 67% on quarter, according to the average of estimates from four brokerages. The highest estimate for net profit is INR 1.33 billion by Kotak Securities Ltd., while the lowest is INR 547 million by Motilal Oswal Financial Services Ltd.

The company is expected to report a net earned premium of INR 40.99 billion in the September quarter, up nearly 11% on year and 4% on quarter, according to the average of estimates. The highest estimate for net earned premium is INR 42.50 billion by JM Financial Institutional Securities Pvt. Ltd. and the lowest is INR 39.83 billion by Motilal Oswal Financial Services.

Data from the General Insurance Council showed that the company's premium income for the September quarter rose 3.2% on year to INR 44.21 billion. Within this, its retail insurance premium rose 7.6% to INR 42.32 billion, but the group insurance segment premium nearly halved to INR 1.87 billion.

Growth in both gross written premiums and net earned premiums is expected to be in the single digit due to the new accounting norms introduced from Oct. 1, 2024, according to brokerage Motilal Oswal. These norms mandated non-life insurers to book premium income for only one year on long-term policies. Earlier, insurance companies recorded the entire premium income on long-term policies in the year they sold the policy.

The company is expected to report an underwriting loss of INR 1.54 billion in the September quarter, according to the average of estimates. The lowest estimate for the company's underwriting loss is INR 1.15 billion by Kotak Securities and the highest is INR 2.50 billion by Motilal Oswal. Star Health had reported an underwriting loss of INR 1.95 billion in the year-ago quarter and an underwriting profit of INR 717 million in the trailing quarter.

The company is expected to report a claims ratio of 71.0-72.5% for the September quarter, according to two estimates. The lower estimate is by Kotak Securities and the higher is by brokerage Motilal Oswal. The company had reported a claims ratio of 72.8% in the year-ago quarter and 69.5% in the trailing quarter. The second quarter is expected to be weaker for insurance companies due to a rise in infectious diseases during the monsoon, according to Kotak Securities.

Star Health is expected to report a combined ratio of 101.5-104.0% according to two estimates. The lower estimate is from Kotak Securities and the higher is from Motilal Oswal. The insurance provider had reported a combined ratio of 103% in the year-ago quarter and of 102.2% in the trailing quarter. The combined ratio shows how much an insurance company spends on claims and expenses relative to the amount it earns from premiums. A ratio below 100% means the company is generating an underwriting profit, while a ratio above 100% means it is paying out more in claims than it is receiving in premiums.

Brokerages are divided over the company's combined ratio. Kotak Securities expects the combined ratio to decline on year due to a moderation in the claims ratio. However, Motilal Oswal expects the company's combined ratio to rise, led by its commission ratio and operating expenditure.

The company's income from investments is likely to decline from a year ago and will hit its bottom line, JM Financial said. But YES Securities said the insurance provider is expected to generate enough return on investments to register a net profit for the reporting quarter. The company's income from investments is expected to be INR 2 billion for the September quarter, according to brokerage Motilal Oswal. Star Health reported an income from investments of INR 2.08 billion in the year-ago quarter and INR 1.77 billion in the trailing quarter.

Star Health is a health insurance company headquartered in Chennai that offers services and products in health, personal accident, and overseas and domestic travel insurance. The health insurance provider caters to individuals and companies and operates through various channels, including digital, aggregators, and brokers.

The company will report its earnings on Tuesday. The impact of the goods and services tax exemption on the company will be a key factor to monitor, according to brokerage Motilal Oswal.

Monday, shares of Star Health ended marginally lower at INR 487.10 on the National Stock Exchange. The company's shares are up nearly 9% from Jul. 29, when it reported earnings for the June quarter.

Of the 10 research reports on the company available with Informist, nine have a "buy" rating and one has a "sell" rating. The average target price for the "buy" recommendations is INR 509.

Following are the Jul-Sept earnings estimates for Star Health, in INR million, from four brokerages in descending order of net profit:

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Edited by Saji George Titus

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