Star Health Shines Bright: A Deep Dive into H1 FY26 Performance

Star Health and Allied Insurance Co. Ltd. has delivered a robust performance in the first half of fiscal year 2026, showcasing strategic clarity and operational efficiency. The company reported a gross written premium (GWP) of INR 8,809 crore for H1 FY2026, marking a commendable 12% year-on-year growth. This growth was predominantly fueled by its strong retail health segment, which saw a nearly 17% increase in GWP to INR 8,332 crore. The company's profit after tax (PAT) under IFRS stood at INR 518 crore, a significant 21% rise compared to H1 FY2025. This strong financial showing underscores Star Health's continued market leadership and its effective execution of a risk-first, digital-first strategy.

Strategic Shifts and Operational Excellence

Star Health's management has been diligently working on portfolio recalibration, a key lever for sustainable and profitable growth. The company successfully exited unprofitable group employer-employee portfolios and repriced high-claims Banca Group books. These actions have yielded positive results, with the net incurred claim ratio for H1 FY2026 improving to 70.6%, a 30 basis point decrease from the previous year. The retail business now constitutes a dominant 95% of the total book, reflecting a strategic focus on more profitable segments.

On the distribution front, the agency vertical remains a powerhouse, contributing 66% of fresh GWP with a 20% growth trajectory. However, the digital channel is emerging as the fastest-growing segment, achieving a 47% fresh premium growth and contributing close to 20% of the overall fresh business. Management emphasized that the digital channel is also their most profitable. Operational costs have been further optimized, with the expense ratio improving to 29.7% in H1 FY2026 from 31.1% in H1 FY2025, driven by investments in technology, automation, and manpower productivity gains.

Digital Prowess and Customer Centricity

Star Health's commitment to digital transformation is evident across its operations. The company has implemented a new claims platform, migrating almost 40% of its claims traffic, which is expected to enhance productivity and fraud detection. A new agency app has been launched to empower its 8 lakh advisors with faster quotes and real-time performance dashboards. The customer app, developed in-house, has reached a milestone of 12 million downloads, with 9% of retail new policy issuances originating directly from the app. These initiatives highlight a strong focus on improving customer and agent experience through technology.

Customer centricity is further reinforced by improved claim settlement ratios, now at 90% compared to 85% last year. The Net Promoter Score (NPS) for claims improved to 61 points from 52 points in H1 FY2025, and the overall company NPS also rose to 61 points from 59 points. The company's wellness initiatives, including the expansion of home healthcare to over 250 cities and a 121% growth in telemedicine usage, contribute to better customer outcomes and reduced readmissions.

Favorable Tailwinds and Future Outlook

The recent GST exemption on retail health indemnity policies is a significant tailwind for Star Health, making policies more affordable and driving demand. Management reported an encouraging momentum in October, with almost 50% growth in fresh business. They anticipate improved persistency rates and continued focus on preferred geographies and profitable products. The company maintains a healthy solvency ratio of 2.15x, well above regulatory requirements, providing a strong capital base for future growth.

Star Health is also exploring opportunities in new segments like OPD and dental insurance, leveraging the GST waiver to expand its product offerings. The management reiterated its commitment to an annual repricing strategy to counter medical inflation, ensuring long-term profitability. Overall, Star Health's H1 FY2026 performance reflects a company that is strategically agile, operationally efficient, and well-positioned to capitalize on the evolving health insurance landscape in India.