Hyderabad, May 7, 2026, 18:36 IST
- Star Health plans two lower-cost health covers for tier-II and tier-III cities as it targets Rs 24,000 crore in gross written premium in FY27. Gross written premium means premiums booked before deductions.
- Its claim payouts in Andhra Pradesh and Telangana rose 24% in FY26, while a Kerala consumer panel faulted the insurer over a COVID-era claim denial.
- Indian equity trading had closed by publication time; NSE’s normal equity market closes at 15:30 IST.
Star Health and Allied Insurance plans to launch two affordable health insurance products for smaller Indian cities this fiscal year, leaning into price-sensitive markets just as rising payouts and a consumer-forum order sharpen scrutiny of claims handling.
The timing matters. Health insurance customers are facing higher hospital bills, and Star Health Managing Director and CEO Anand Roy told the Economic Times that “annual hikes on health insurance premiums are here to stay,” with the industry dealing with medical inflation of 13% to 14% a year. Medical inflation refers to the rise in treatment, hospital and related healthcare costs. The Economic Times
Roy told reporters the company hopes to reach Rs 24,000 crore in gross written premium in FY27, up from about Rs 20,400 crore in FY26, and has set a Rs 30,000 crore target for FY28. “We are expanding into the smaller towns and villages,” he said. ETHealthworld.com
The new products are expected to use a narrower hospital network to hold down premiums. Roy described it as a “preferred network of partners,” saying customers who accept a limited hospital list could pay less, with distribution mainly through agents and digital channels. The Economic Times
In Andhra Pradesh and Telangana, Star Health said it settled Rs 1,254 crore of claims across 1.8 lakh cases in FY26, up 24% from Rs 1,014 crore a year earlier. Regional gross written premium rose 17% to Rs 2,268 crore, and policies increased to 9.4 lakh from 8.8 lakh.
Nationally, the company settled Rs 11,903 crore covering 30.6 lakh claims in FY26. It said its hospital network exceeds 15,000, while 75% of claims were processed through its new digital platform.
The operating backdrop has improved. Star Health reported FY26 profit after tax of Rs 911 crore, up 16% year-on-year, and said its combined ratio fell to 98.8% from 101.1%. A combined ratio measures claims and expenses against premium income; below 100% usually signals underwriting profit.
The push also puts Star Health deeper into a competitive health-cover market. IRDAI flash figures for March 2026 showed stand-alone private health insurers’ gross direct premium at Rs 45,865.95 crore for the year to March, up 19.4%, with Care Health at Rs 10,031.31 crore and Niva Bupa at Rs 8,585.93 crore; ICICI Lombard, a diversified general insurer with health products, booked Rs 28,712.46 crore.
A separate claims dispute may test the company’s customer-facing discipline. The District Consumer Disputes Redressal Commission in Thrissur held Star Health liable for rejecting a Corona Rakshak policy claim because the policyholder had been hospitalised for nearly 70 hours, short of the 72-hour requirement.
The commission said the 2.5-hour shortfall was not a fundamental breach and that applying policy terms in a hyper-technical way would defeat the policy’s purpose. It ordered Star Health to pay Rs 1 lakh as the insured amount, Rs 10,000 as compensation and Rs 5,000 as litigation costs, with 9% annual interest from the complaint filing date.
The risk is that cheaper plans work only if hospital pricing deals hold and customers accept tighter networks. If medical costs keep rising, or if restricted hospital access creates disputes, the savings pitch could come under pressure; the Thrissur order shows consumer forums may not always accept strict claims denials.
Roy said technology investments should cut operating expenses and help claims performance through tighter hospital pricing, new products and fraud-management tools. The company called FY26 a year of “disciplined execution,” but the next test is more basic: selling cheaper cover without making claims feel harder. The Economic Times
