Star Health And Allied Insurance Company Limited has informed the Exchange about Investor Presentation
Ref: SHAI/B & S/SE/139/2023-24
To, The Manager Listing Department BSE Limited Phiroze Jeejeebhoy Towers Dalal Street Mumbai – 400001 Scrip Code: 543412
Dear Sir/ Madam,
Date: October 31, 2023 Place: Chennai
To, The Manager Listing Department National Stock Exchange of India Limited Exchange Plaza, 5th Floor, Plot C/1, G Block, Bandra-Kurla Complex Mumbai – 400051. Symbol: STARHEALTH
Sub: Earnings Call Presentation – September 30, 2023
Further to our letter SHAI/B & S/SE/135/2023-24 dated October 26, 2023 regarding intimation of Q2 & H1 FY 2024 Earnings Call, please find enclosed the presentation on performance of the Company to be made to the Investors and Analysts on Tuesday, October 31, 2023 at 7.00 P.M. IST for the quarter and half-year ended on September 30, 2023.
The above information is also being hosted on the Company's website at www.starhealth.in
This is for your kind information.
For Star Health and Allied Insurance Company Limited,
Jayashree Sethuraman, Company Secretary & Compliance Officer
Encl.: As above
H1FY24 & Q2FY24 PERFORMANCE REVIEW
October 2023
Key pillars of our Strategy
1
2
3
4
5
6
Leadership in Retail Health
Well Spread Distribution Network
Investment in Technology
Diversified and Specialized Product Suite
Focus on Risk Management
Superior Operating Performance
33% Retail Health Insurance Market Share 16% CAGR in no. of agents since FY21 to 0.67 million
65% premium value issued digitally
32% Retail Health Accretion Market Share
869 Branches
INR 4.8bn GWP acquired from online channels
Specialized Products contribute 15.1% of Star Health’s total retail health GWP
14.2k Network Hospitals
Solvency Ratio at 2.13x (premium based)
66% claims processed through ANH
Best-in-class Opex/GWP Ratio of 17.0%
2
Key Performance Indicators (1/2)
Particulars
Fiscal Year Ended March 31,
Six Months Ended September 30,
(INR millions, unless otherwise stated)
2022
2023
2022
2023
GWP
Period-on-period growth of GWP
Retail Health Renewal Premium Ratio
Number of agents (in '000s)
Number of hospitals in network (in actual number)
Combined Ratio
Underwriting Profit/(Loss)
Investment Income
Investment Yield
Profit/(Loss) after tax
Net worth
Return on equity*
1,14,634.7
1,29,524.7
56,565.6
66,803.2
22.1%
94.0%
549.5
12,820
117.9%
(20,615.3)
7,928.2
8.2%
(10,406.7)
45,133.8
-26.0%
13.0%
95.0%
625.9
14,203
95.3%
2,046.2
8,345.6
6.9%
6,185.9
54,301.3
12.4%
11.6%
94.4%
586.0
14,000
97.9%
1,442.2
4,109.7
7.1%
3,063.5
48,761.2
6.5%
18.1%
97.8%
665.5
14,230
98.4%
670.9
5,061.2
7.4%
4,131.4
58,916.0
7.3%
Return on Equity = Profit After Tax/Average Net Worth. Note: Numbers are basis 1/365 URR method. ROE is non-annualised
3
Key Performance Indicators (2/2)
Claims, Expense and Combined Ratio
117.9%
87.1%
95.3%
97.9%
98.4%
65.0%
67.3%
67.1%
30.8%
30.3%
30.7%
31.3%
FY22
FY23
H1FY23
H1FY24
Claims Ratio
Expense Ratio
Profit After Tax (PAT) (INR billion)
6.2
35%
4.1
3.1
-10.4 FY22
PAT
FY23
H1FY23
H1FY24
Note: All numbers are basis 1/365 URR method
4
Agenda
Our Strategy
Performance Update
5
1
Leadership in Attractive Retail Segment
Retail Health Market Share
307
354
159
188
33%
34%
33%
33%
FY22
FY23
H1FY23
H1FY24
Retail Health Industry Size in INR billion
Gross Written Premium (INR billion)
+13%
115
101
130
119
+18%
67
61
57
52
2
12
2
8
FY22
FY23
1
4 H1FY23
1
4 H1FY24
Retail
Group
PA
Travel
6
2
Largest and Well Spread Distribution Network
Total Agency Force In 000’s
15.7%
Sponsored Health Agency Force
In 000’s
23.7%
462
550
626
666
59
79
92
100
FY21
FY22
FY23
H1FY24
FY21
FY22
FY23
H1FY24
Channel wise mix, H1FY24
Extensive Branch Network
Other Direct
Digital
4%
Banca
7%
Brokers
2% 5%
Note: Brokers excludes online brokers such as Policybazaar
82%
Individual Agents
807
835
815
869
FY22
FY23
H1FY23 H1FY24
7
2
Extensive Footprint and Alternate Distribution Channels
Partner Integration
57%
Fresh Banca Growth – (H1FY24)
Focus on SME & Banca Group Health Sales
INR billion
77%
SME + Banca contribution
SME
2.2
3.0
Banca
0.4 H1FY23
0.5 H1FY24
8
3
Continued focus on Digital Growth
Digital Acquisition
GWP acquired through online channels, INR ‘billion
Digital Issuance
% of premium collection
8.9
7.2
4.1
4.8
60%
62%
65%
FY22
FY23
H1FY23
H1FY24
FY22
FY23
H1FY24
38%
Fresh Digital Growth – (H1FY24)
Digitizing Customer Acquisition
More than 80% of agents have downloaded the STAR ATOM app
Note: Digital includes web-sales, tele-sales, web aggregators and online brokers
9
4
Diversified and Specialized Product Suite
Specialized Products
Star Cancer Care Policy
Star Senior Citizens Red Carpet Health Insurance Policy
Star Cardiac Care Policy
Young Star Policy
Star Diabetes Safe Policy
♀
Women Care Policy
Retail Premium Mix for Specialized Products (%)
New Product launches H1-2024
15.1%
15.5%
16.5%
15.1%
FY22
FY23
H1FY23
H1FY24
Smart Health Pro Star Domestic Travel Individual and Group covers Antyodaya Shramik Suraksha Yojana
Note: Specialized products include disease and age specific products like Cancer care, Cardiac Care, Diabetes Safe, Senior Citizen Red Carpet, Women’s Care and Young Star
10
5
Strong Domain Expertise Driving Superior Claims Ratio
Net Incurred Claims Ratio(1)
Increasing Sum Assured
Fraud Analytics
87.1%
65.0%
67.3%
67.1%
13%
10%
11%
10%
Growth of Average Sum Assured in Retail Health policies
Impact on Claims outgo
2.9%
1.7%
FY22
FY23
H1FY23
H1FY24
FY23
H1FY24
H1FY23
H1FY24
Claims Ratio
New
Overall
Rejections (% of GEP)
(1) Net incurred claims ratio is defined as net incurred claims divided by net earned premium. All numbers are basis 1/365 URR method
11
5
Extensive Claims Processing and Network Negotiation
9.8m
Claims Settled Since Inception(1)
90%
Cashless authorization< 2 hr
ANH(2) Share…
Proportion of total cashless claims
64%
67%
66%
66%
FY22
FY23
H1FY23
H1FY24
14.2k
Network Hospitals
Largest Hospital network Valuable service provider (VSP)
introduced to improve TAT’s, Best pricing, transparency etc.
Note: (1) Data as of Sep 30, 2023 (2) ANH refers to Agreed Network Hospitals with better negotiated package based pricing. On number of claims count.
12
Agenda
Our Strategy
Performance Update
13
6
Financial Performance Combined Ratio
117.9%
87.1%
30.8%
FY22
95.3%
97.9%
98.4%
65.0%
67.3%
67.1%
30.3%
FY23
30.7%
31.3%
H1FY23
H1FY24
Claims Ratio
Expense Ratio
Profit Before Tax (PBT)
(INR billion)
8.3
+35%
4.1
5.5
Opex/GWP Ratio
16.0
15.9
16.5
17.0
FY22
FY23
H1FY23
H1FY24
Profit After Tax (PAT)
(INR billion)
6.2
+35%
3.1
4.1
-14.0 FY22
FY23
H1FY23
H1FY24
PBT
Note: All numbers are basis 1/365 URR method
-10.4 FY22
FY23
H1FY23
H1FY24
PAT
14
6
Robust Investment Performance
Total Investments Assets
INR billion
2.4x
2.4x
Investment Leverage
2.3x
2.3x
114
134
117
140
FY22
FY23
H1FY23
H1FY24
150
100
50
0
2.5
2.0
1.5
1.0
0.5
0.0
Investment Income
INR billion
+5%
7.9
8.3
+23%
4.1
5.1
FY22
FY23
H1FY23
H1FY24
Steady Returns...
…with fixed income portfolio
8.2
6.9
7.1
7.4
FY22
FY23
H1FY23
H1FY24
76% AAA, Govt. Portfolio & FD
Long-Term Funds
Short-Term Funds
Government Securities, State Development Loans, Corporate Bonds, Fixed Deposits, REITs, InvITs and ETFs
Bank FDs, Overnight Mutual Funds, CPs, CDs, T-Bills, CMBs, Short Maturity Bonds and Tri-Party REPOs (TREPs)
15
7
Annexure: Accounting — IGAAP and IFRS
16
ParticularsMarch 31, 2023Profit as per IGAAP excluding ESOP cost729 RoE as per IGAAP14.7%Lease and Security Deposit-1 Deferred Acquisition Cost (DAC)150 Unrealised Gain / (Loss) on Investments21 Provision based on Expected Credit Loss (ECL)-2 Provision for Tax-38 Deferred Tax Asset38 Profit as per IFRS897 RoE as per IFRS17.7%Impact on Profit168 Impact on RoE3.1% THANK YOU
17
Glossary
Particulars
FY
GWP
GEP
CAGR
Y-o-Y
VQST
URR
ANH
PA
SME
TAT
Financial Year
Gross Written Premium
Gross Earned Premium
Cumulative Annual Growth Rate
Year-on-Year
Voluntary Quota Share Treaty
Unexpired Risk Reserve
Agreed Network Hospitals
Personal Accident
Small and Medium Enterprises
Turn Around Time
18
Star Health registers 35% jump in PAT in Q2FY24
Registers a net profit of Rs. 125 crore for Q2FY24 Maintains robust solvency ratio at 2.1x Operating expense to GWP ratio was at a healthy 16.0% in Q2FY24
Chennai, 31 October 2023: Star Health and Allied Insurance one of India’s leading Health Insurance Company records double-digit growth in both gross written premium and PAT in the second quarter of FY2024 as compared to a year ago. Gross Written Premium grew by 17% to Rs. 3,732 crore versus Rs. 3,193 crore in Q2 of the previous fiscal. The company posted a 35% growth in PAT to Rs. 125 crore in Q2FY24, compared to a profit of Rs. 93 crore in the same period a year ago.
The company's retail health premium witnessed impressive growth, reaching Rs. 3,430 crore in the second quarter of the financial year. This substantial 17% increase compared to the same period last year reflects the company's commitment to meeting the insurance needs of its customers, spanning across the country with heightened focus in tier 3 and tier 4 regions.
In the first half of FY24, Star Health saw 38% growth in fresh digital business, over the same period last year. Also the company registered a 57% fresh banca growth in H1FY24. To increase ease of access, the company redesigned its website to include multilingual support and drove growth through a robust customer awareness digital campaign. Star Health also revamped its payment process to enhance the customer experience and to provide easier access to quality health insurance. During the quarter, a dynamic UPI QR code based payment option was launched that saw rapid adoption by customers.
Commenting on the results, Mr. Anand Roy, MD and CEO of Star Health and Allied Insurance, said, “We’ve witnessed strong growth in the second quarter of FY23-24 in line with our strategy, resulting in a 17% increase in our Gross Written Premium (GWP). We saw increased demand in retail insurance during the quarter and expect this trend to continue in the coming months. Star Health is dedicated to improving customer experience and we've recently introduced a convenient UPI QR code-based payment system to streamline the process of purchasing and renewing health insurance. In addition, we closely examined our partnerships with network hospitals during the quarter, working collaboratively to ensure that our policyholders receive high-quality medical care at reasonable prices. We also initiated new bancassurance partnerships to expand access to top-notch health insurance for individuals nationwide."
The Operating expense to GWP ratio was at 16.0% in Q2FY24 versus 15.8% in Q2FY23. The solvency ratio continues to remain robust at 2.1x in the second quarter, higher than the minimum regulatory requirement of 1.5x.
STAR HEALTH AND ALLIED INSURANCE COMPANY LIMITED Registered office: No.1, New Tank Street, Valluvarkottam High Road, Nungambakkam, Chennai - 600034, Tamil Nadu.
Ph: 044-28288800 | Fax: 044-28260062 | Email: info@starhealth.in | Website: www.starhealth.in
Star Health has a diversified distribution network comprising of strong digital channels, leading bancassurance partners, agency channel, corporate agents, brokers, point of sale persons (POS), insurance marketing firms, web aggregators, and direct business.
As of 30 September 2023, Star Health has 14,230 network hospitals and a wide presence of 869 branches offices spread across 25 states and 5 union territories in India.
Financial Indicators (In Rs. Crore) GWP PBT PAT
Ratios
Financial Indicators ROAE (%) – Combined ratio (%)
Q2 FY2023
Q2 FY2024
Growth %
3,193 121
93
3,732
167
125
Q2 FY2023
Q2 FY2024
1.9% 97.9%
17% 39%
35%
2.2% 99.2%
Disclaimer Certain information set forth in this press release contains “forward-looking information”, including “future-oriented financial information” and “financial outlook”. When used herein, the words “anticipate”, “believe”, “could”, “estimate”, “expect”, “going forward”, “intend”, “may”, “ought to”, “plan”, “project”, “seek”, “should”, “will”, “would” and similar expressions are intended to identify forward-looking statements. Forward-looking statements are provided to allow an understanding of the management’s beliefs and opinions in respect of the future. Although forward-looking statements contained herein are based upon what the Company believes are reasonable assumptions, these statements are not guarantees of future performance and undue reliance should not be placed on them. Such forward- looking statements necessarily involve known and unknown risks and uncertainties, which may cause actual performance and financial results in future periods to differ materially from any projections of future performance or result expressed or implied by such forward-looking statements. Star Health and Allied Insurance Company Limited undertake no obligation to update forward-looking statements to reflect events or circumstances after the aforementioned press release date. Accordingly, the reader is cautioned not to place undue reliance on any forward- looking information or statements.
About Star Health Insurance:
Star Health and Allied Insurance Co Ltd (BSE:543412 | NSE:STARHEALTH) commenced its operations in 2006 as India’s first Standalone Health Insurance Company with business interests in Health, Personal Accident and Overseas Travel Insurance. The company uses its vast resources to focus on service excellence and product innovation to deliver the best to its customers. Star Health has been providing innovative health insurance products to individuals, families and corporates, directly and through various channels – agents, brokers, online and digital channels like web aggregators, fintech, etc. Star Health is also a prominent Bancassurance player with long standing relationship with various banks.
STAR HEALTH AND ALLIED INSURANCE COMPANY LIMITED Registered office: No.1, New Tank Street, Valluvarkottam High Road, Nungambakkam, Chennai - 600034, Tamil Nadu.
Ph: 044-28288800 | Fax: 044-28260062 | Email: info@starhealth.in | Website: www.starhealth.in
As of 31st March 2023, Star Health had 835 branch offices spread across 25 states and 5 union territories in India. The company had 14,203 network hospitals pan India. In FY23, Star Health had a gross written premium of Rs. 12,952 crore and a net worth of Rs. 5,430 crore.
Star Health and Allied Insurance Company Limited is listed on both the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE)
For more information, please contact:
Star Health and Allied Insurance Paul Ebenezer Email ID: paul.ebenezer@starhealth.in Mobile No: 7397398709
Adfactors PR Veena Krishnan Email ID: veena.krishnan@adfactorspr.com Mobile No: 9930309052
STAR HEALTH AND ALLIED INSURANCE COMPANY LIMITED Registered office: No.1, New Tank Street, Valluvarkottam High Road, Nungambakkam, Chennai - 600034, Tamil Nadu.
Ph: 044-28288800 | Fax: 044-28260062 | Email: info@starhealth.in | Website: www.starhealth.in