Analyst's Diary: Will this health insurer's revival last?

Lockdowns, packed hospital beds, and a whiff of fear in the air. That's how history will remember the Covid-19 pandemic that shook us all. But it was also a massive wake-up call. The need for reliable, quality healthcare suddenly became undeniable. And the world had an epiphany about how valuable health insurance is. Evidently, health insurance companies took centre stage. And one company, in particular, bore a massive brunt of the pandemic. But it managed to emerge stronger in the aftermath, which made it a deserving candidate to be covered in this issue. The story is about Star Health Insurance. Like many, the financial toll of the pandemic was heavy on the Chennai-based health insurer. As hospitalisations increased, so did Star Health's payout for medical expenses. The company's claims ratio shot up to 93 per cent in FY21 from 66 per cent in FY20. With payouts ballooning faster than premiums coming in, the company found itself grappling with hefty losses. But despite the pandemic's gut punch, Star Health staged an impressive comeback. As of FY24, the company managed to capture a significant 33 per cent market share to become the largest player in India's retail health insurance sector. Not only that, it also posted the highest-ever profit of Rs 845 crore in FY24. Its net written premium surged 37 per cent annually between FY21 an