Star Health Reports Spectacular Q3 FY26 Performance with 414% Profit Surge
Star Health and Allied Insurance Company has delivered an outstanding financial performance for the third quarter of fiscal year 2026, showcasing remarkable growth across key metrics. The Chennai-based standalone health insurer witnessed a dramatic improvement in profitability, supported by robust premium expansion, enhanced underwriting discipline, and substantial gains from investments.
Financial Highlights: Profit Multiplies Four-Fold
The company reported a profit after tax of Rs 449 crore for the quarter ended December 2025 under Ind AS accounting standards. This represents an extraordinary 414% increase compared to the Rs 87 crore recorded in the same period last year. Profit before tax also demonstrated impressive growth, rising 408% year-on-year to reach Rs 594 crore.
Premium Growth and Underwriting Turnaround
Gross written premium expanded significantly by 23% to Rs 5,047 crore during the quarter, while net earned premium increased 12% to Rs 4,250 crore. A key factor in the improved profitability was the company's underwriting performance, which swung from a loss of Rs 79 crore in Q3 FY25 to a profit of Rs 46 crore in Q3 FY26. This positive shift was supported by net incurred claims growing at a slower pace of 7% to Rs 2,923 crore.
Investment Income and Expense Management
Investment income witnessed a remarkable 176% surge to Rs 569 crore from Rs 206 crore a year earlier, supported by an investment yield of 9.6%. Meanwhile, net expenses showed controlled growth, increasing 11% year-on-year to Rs 1,280 crore, reflecting the company's focus on operational efficiency.
Improved Operational Metrics
The company's operational health strengthened considerably during the quarter:
- Claims ratio declined to 68.8% from 71.8% a year ago
- Expense ratio moderated marginally to 30.1% from 30.3%
- Combined ratio improved to 98.9% from 102.1% in the corresponding quarter of the previous year
Business Segments and Digital Transformation
The insurer attributed its strong performance to exceptional growth in the retail business, with retail gross written premium rising 27% year-on-year. Fresh retail premiums led this expansion with an impressive 60% jump. Digital channels played a crucial role, accounting for 76% of overall premium collections during the quarter. Furthermore, AI-enabled systems efficiently handled 57% of claims traffic, demonstrating the company's technological advancement.
Management Perspective and Future Outlook
According to Star Health and Allied Insurance, the improved performance reflects tighter underwriting discipline, portfolio recalibration, and better cost control. Chief Executive Officer Anand Roy emphasized that the company remains focused on sustaining profitability while scaling growth, indicating a balanced approach to expansion and financial health.
The Q3 FY26 results position Star Health as a strong performer in the health insurance sector, with multiple growth drivers contributing to its financial success. The combination of premium growth, underwriting improvements, and investment gains has created a powerful formula for profitability that the company aims to maintain in future quarters.
