Star Health Q1 FY27 Earnings Call: Guides 15-16% Revenue Growth, Fresh Business from First-Time Buyers at 94% (STARHEALTH)

Star Health & Allied Insurance Company Ltd held its Q1 FY27 earnings call on July 29, 2026. Here's a quick read of what management said — performance, strategy, and the outlook ahead.

Headline Results & Key Metrics

• Gross Written Premium of Rs.4,672 Cr (N basis) in Q1 FY 2026-2027, up 19% YoY; 1-by-N basis at Rs.4,287 Cr.
• Underwriting profit of Rs.111 Cr in Q1 FY 2026-2027, versus Rs.16 Cr in Q1 FY 2025-2026, marking the fourth consecutive quarter of core underwriting profitability.
• Reported PAT of Rs.550 Cr in Q1 FY 2026-2027, up 25% YoY; Normalized PAT (at 8% annual investment yield) rose 44% YoY to Rs.386 Cr.
• Annualized normalized ROE improved to 15.6% in Q1 FY 2026-2027 from 12.2% in Q1 FY 2025-2026.
• Combined Insurance Service Ratio (CISR) improved 1.7% to 97% in Q1 FY 2026-2027, from 98.7% in Q1 FY 2025-2026.
• Insurance revenue grew 13.4% in Q1 FY 2026-2027; management expects revenue growth to reach 15–16% in subsequent quarters of FY 2026-2027.

Fresh Business, Market Share & Geographic Trends

• Fresh retail health GWP increased 35–37% YoY (N basis: Rs.1,039 Cr; 1-by-N: Rs.730 Cr) in Q1 FY 2026-2027, with 94% of new business from first-time insurance buyers (vs 90% in Q1 FY 2025-2026).
• Retail market share stood at 29% in Q1 FY 2026-2027, down from 31% in Q1 FY 2025-2026, partly due to long-term policy reporting impacts; clean comparability expected only by FY 2027-2028.
• Fresh business growth from non-metro geographies is 3.5 times that of metro regions in Q1 FY 2026-2027, reflecting deepening penetration.
• Renewal ratio improved to 102% in Q1 FY 2026-2027, up 3% YoY, indicating strong customer retention.
• Growth expected to moderate in H2 FY 2026-2027 after the industry-wide jump in H2 FY 2025-2026 post-GST waiver, with management acknowledging a high base effect.

Loss Ratio Improvement & Portfolio Quality

• Loss ratio improved 100 basis points in Q1 FY 2026-2027, driven by strategies implemented over the last 1.5–2 years, including repricing, portfolio selection, geography mix, claims management, and wellness/telemedicine.
• Retail loss ratio for Q1 FY 2026-2027 was in the range of 67.5–68%; the group component is very small at ~2.5% of GWP.
• Teleconsultations scaled to 50,000 in Q1 FY 2026-2027 from 9,000 in Q1 FY 2025-2026, supporting loss ratio improvement through early intervention.
• Senior citizen segment accounts for under 5% of the overall book as of Q1 FY 2026-2027, with management focused on younger cohorts.
• Retail claim settlement ratio of 91% in Q1 FY 2026-2027, up 1% over Q1 FY 2025-2026; 9.5 lakh+ claims settled in the quarter, 80%+ cashless.
• Vector-borne disease season is underway in Q1 FY 2026-2027, but management expressed confidence given wellness and teleconsultation initiatives.

Proprietary Channel Strength & Digital Acceleration

• Proprietary distribution (agency + D2C) contributed 19%+ of retail business in Q1 FY 2026-2027; total agent count reached 8.5 lakh, with ~20,000 agents added in the quarter and 19% YoY productivity improvement.
• Digital D2C fresh business grew 142% YoY in Q1 FY 2026-2027, with 98% of customers new to insurance and 74% of digital fresh business originating from the company's own D2C platform.
• 90% of business comes from proprietary channels, which management believes positions the company favorably amid any distribution reform by the regulator.
• Customer app reached 16 million downloads and 1.5 million monthly active users; 97% of new applications were digitally sourced in Q1 FY 2026-2027.
• Company NPS improved 12 points to 65 at June 2026, reflecting enhanced customer experience.

Expense Control, Reinsurance & Profitability Targets

• Expense ratio improvement of 30–40 bps annually is expected to continue over the coming years (period unspecified), driven by operating leverage and digital adoption.
• Other expenses rose 23% YoY in Q1 FY 2026-2027 due to the non-availability of GST input credit and annual wage hikes.
• Reinsurance cost expected to decline as a one-year quota-share treaty fades out and renegotiations with GIC Re progress; net reinsurance expenses guided to 0.5–0.6% of net earned premium for FY 2026-2027.
• Management targets a mid-to-high teens ROE on a steady-state basis (no specific FY given), with trends improving over the last 3–4 quarters.
• Finance income from insurance contracts of Rs.38.8 Cr in Q1 FY 2026-2027 arises from the time value of money on long-term contracts under the PAA method.
• No guidance is provided for loss ratio improvement; management described the 100 bps improvement as a "work in progress, not a destination."

Outlook, Pricing Strategy & Base Effects

• Insurance revenue growth of 15–16% expected for the full year FY 2026-2027, increasing further in FY 2027-2028.
• Growth to moderate in H2 FY 2026-2027 due to the high base from the GST tailwind in H2 FY 2025-2026; unwind of long-term policies could partially offset the headwind.
• Base effect may extend into H1 FY 2027-2028, management noted, as the comparison period remains elevated.
• Pricing strategy: future adjustments will be maintenance-based, not significant hikes, and will be driven by underwriting quality and expected loss ratios per product.
• Long-term policies account for ~40% of fresh retail premium, providing revenue visibility and smoothing the base effect.
• Q2 FY 2026-2027 expected to follow the typical seasonal pattern of higher loss ratios for health insurance, per management commentary.