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STARHEALTH hosted an analyst meet on 29th March to share the process of claim settlement and outlook on its retail health insurance segment. Below are the key takeaways

The Indian health insurance market remains in the early stages of its life cycle and continues to be one of the most underpenetrated health insurance markets globally. A number of demographic factors are expected to continue to drive growth in the health insurance industry in India, with the retail health insurance segment in India being particularly attractive due to its lower penetration, density and claims ratio compared to other health insurance segments.

Health Insurance Industry

Many insurance companies face challenges in managing their costs while maintaining profitability. To address these issues, insurers may need to implement cost-cutting measures and improve operational efficiency to bring down the combined ratio, which is the ratio of losses and expenses to premiums earned. Insurers also need to be mindful of the regulatory environment, as regulators closely monitor the industry to ensure that insurers do not take excessive risks that could jeopardize policyholders' interests. Therefore, insurers cannot rely on increasing their expense ratios or margins to improve profitability. Instead, they need to focus on improving underwriting results, optimizing their investment portfolios, and enhancing customer experiences to drive growth and profitability.

A significant portion of the population in India does not have health insurance coverage, which accounts for 31.5%, which can make it difficult for them to access healthcare services when they need them. While group insurance and retail insurance may provide coverage for some individuals, it is important to note that these types of coverage may not be sufficient for everyone. Group insurance may be provided by employers or other organizations, but may have limitations in terms of the types of services covered or the level of coverage provided.

Star health competitive strengths

* Largest and Well-spread Distribution

Star Health is one of the leading health insurance providers in India with a wide distribution network that spans across the country. With a large number of individual agents, corporate agents, banks, brokers, and web aggregators, Star Health is able to reach a large customer base and provide them with the necessary assistance in selecting the most appropriate health insurance policy and making claims. The distribution network of Star Health is well-spread and includes the largest branch network among non-public health insurance providers in India. This enables the company to provide assistance and support to its customers in a timely and effective manner. In addition to individual agents, Star Health also partners with corporate agents such as banks and insurance marketing firms to distribute its products. The company also leverages digital channels such as telemarketing, website, and interactive applications to reach out to customers directly and provide them with a seamless buying experience. Overall, Star Health's wide and well-distributed network of agents and partners has enabled the company to become one of the leading health insurance providers in India, with a strong reputation for customer service and support.

* Focused on growing ‘Agency channel’

Focusing on growing its agency channel can be a smart strategy for Star Health to increase its market share and customer base in the insurance industry. Sponsored agents can be a valuable asset for the company as they can help to reach out to potential customers and promote the company's products and services. By increasing the number of sponsored agents from 28 to 79 in FY2022, and the total number of agents from 284 to 550 in the same period, Star Health has demonstrated its commitment to expanding its agency channel. This can lead to increased sales and revenue, as well as enhanced customer service and satisfaction.

* Renewal Retention Cell

Star Health has 18 call centers located across India, with over 200 staff members handling calls in total. Additionally, they receive approximately 40,000 calls per day across all of their centers. This suggests that Star Health likely provides a significant amount of support and assistance to their customers and clients throughout the country. This 18 call centers are responsible for handling a significant number of policy renewals. Specifically, in the fiscal year 2022-2023, these call centers will process 6.8 million policy renewals. This is likely a reflection of the company's commitment to providing excellent customer service and ensuring that their clients are able to renew their policies in a timely and efficient manner.

* Expanding channel partners networks

Star Health is taking steps to increase its presence and distribution channels by partnering with more companies. Renewing its relationship with PNB bank for 6 years is a positive move, and it's great to hear that the company is also looking to renew with BOB soon. By increasing its share in channel partner companies to 15%- 20%, Star Health will likely have more control over its distribution channels and may be able to reach a larger customer base. This could help the company to grow and increase its revenue in the long run.

Star Health is taking steps to increase its presence and distribution channels by partnering with more companies. Renewing its relationship with PNB bank for 6 years is a positive move, and it's great to hear that the company is also looking to renew with BOB soon. By increasing its share in channel partner companies to 15%- 20%, Star Health will likely have more control over its distribution channels and may be able to reach a larger customer base. This could help the company to grow and increase its revenue in the long run.

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