Star Health and Allied Insurance, the largest standalone health insurance company in the country, is looking to close the year with a gross underwritten premium of Rs 1,100 crore, a few shades lower than the targeted levels.
The company, which lost the state-sponsored health insurance contracts in Tamil Nadu and Andhra Pradesh, has seen a 11 per cent decline in its gross underwritten premium in 2011-12 due to the same reason.
In 2010-11, Star Health clocked a 30 per cent growth in gross underwritten premium to Rs 1,248 crore. The company which counts as its shareholders, PE investors like Sequoia Capital and ICICI Ventures, will see its profits too taking a hit this year due to the reserves to be made, said the company chairman V Jagannathan, to Financial Chronicle.
Health insurance business has been a non-profitable for many general insurers due to the loss ratios ranging between 120-150 per cent on account of higher claim levels and lower premium.
To prop up its business due to the loss of the contracts, the company has undergone a course correction to focus more on retail and individual health insurance policies. The attempt has paid off, and the company has seen its individual health insurance business clock a new premium income of Rs 600 crore this year, against Rs 300 crore last year.
In the year to come, we will continue our focus on retail health insurance business to bring in growth. We are open to bidding for government-sponsored health insurance schemes but on our terms, Jagannathan said. The company lost Rs 600 crore annual premium after losing the Tamil Nadu government scheme and Rs 200 crore on the Andhra Pradesh government scheme.
For the 10-month period between April 2011-January 2011, Star Health saw its gross written premium decline by 14 per cent to Rs 1,009 crore, against Rs 1,175 crore in the corresponding period the previous year.
About 80 per cent of the company’s total business has come from health insurance, while the remaining 20 per cent comprises personal accident and overseas travel insurance.
By R Srividhya
http://www.mydigitalfc.com/insurance/star-health-looks-clock-rs-1100-cr-business-fy12-569
