Chennai: Star Health and Allied Insurance remains focused on long-term growth despite rising medical inflation and periodic mark-to-market volatility in its investment portfolio, the company said. The standalone health insurer reported a net loss of Rs 55 crore for the fourth quarter of fiscal 2025-26, compared with a profit of Rs 271 crore in the same period a year ago, due to mark-to-market losses of Rs 558 crore arising from geopolitical tension-induced correction in equity markets.
Long-Term Investment Strategy
"Given the current market environment, it is difficult to predict what will happen in the near term. But we are long-term investors in terms of our investment portfolio. Around 15%-16% of the company's investment portfolio is allocated to equity and equity-linked instruments, including REITs, InvITs and ETFs. So we are not overly concerned about quarterly volatility," said Anand Roy, Managing Director and CEO of Star Health, in an interview.
Roy added that the transition to IFRS-based reporting standards has increased the visibility of quarterly fluctuations, since equity market movements now flow directly through the profit-and-loss account. To help investors assess underlying performance, the company has begun providing a "normalised" equity return assumption of around 10%.
Launch of Affordable Health Insurance Product
Marking two decades of operations, Star Health will launch an affordable health insurance product called 'Value Plus' on Wednesday. The product offers customisable high sum-insured covers ranging from Rs 7.5 lakh to Rs 25 lakh and will be rolled out across India, excluding metro cities and state capitals.
"Value Plus comes with premiums that are nearly 20% lower than the company's existing offerings in non-metro markets. We are not only a big-city player. Almost 50% of our business comes from smaller cities outside metros and state capitals," said Roy.
The Chennai-headquartered company expects 'Value Plus' to contribute around 10% of its topline in fiscal 2026-27. It is targeting gross written premium (GWP) of about Rs 24,000 crore in FY27, compared with around Rs 20,400 crore in FY26, implying expected growth of about 18%.
Pricing and Premium Outlook
On pricing, Roy said the company continuously reviews product performance and takes pricing actions when loss ratios exceed internal thresholds. However, the company indicated that no immediate premium hikes are planned this quarter.
