Existing policyholders going for higher sum assured after GST exemption, says Star Health CFO
2 min readStar Health and Allied Insurance anticipates its average ticket size will rise to approximately ₹20,000 by the end of this fiscal year, driven by higher new customer acquisition and increased sum assured among existing policyholders following GST exemptions, according to Chief Financial Officer Nilesh Kambli. In an interview with businessline, Kambli emphasized the company’s focus on balancing market share expansion with profitability. Key excerpts:
Post-earnings reports highlighted nearly 50% growth in new business for October after GST exemption on retail health policies. Did this stem from new customers? How has November performed?
The GST reduction is a positive development, making policies more affordable. October saw robust demand with over 50% premium growth and a 25% rise in customer numbers, along with increased uptake of long-term plans. Momentum continued in November, albeit slightly slower, with premium growth of 30-35%. This appears sustainable due to shifting consumer behavior, not pent-up demand.
How have existing policyholders responded to the 18% premium reduction? Are they opting for higher coverage? What is the projected average ticket size for this fiscal year?
We observed three key trends: a 2-3% improvement in renewal rates, higher sum assured as policyholders leverage savings to enhance coverage, and greater demand for add-on covers. The average ticket size reached ₹19,000–19,500 in H1FY26 and is expected to approach ₹20,000 by year-end.
How is the company addressing the loss of GST input tax credit (ITC) for distribution? What steps are being taken to mitigate its impact?
Industry-wide, insurers have shifted the 18% GST burden on intermediary commissions to agents, brokers, and corporate agents, as expense-of-management (EoM) regulations pressure profitability. For operating costs like IT, rent, and logistics, the company absorbs the GST impact. A silver lining is reduced pharmacy expenses due to GST changes.
The company exited unprofitable group employer-employee policies. How will this affect FY26 loss and combined ratios?
Exiting large corporate group policies—where loss ratios were unsustainable—leaves us focused on profitable SME segments, which maintain a combined ratio of 96–97%. This exit should lower our overall combined ratio by 0.5–1%.
What was Star Health’s retail health insurance market share in H1FY26? How do you plan to grow it over the next few years?
We retained a 32% retail market share by premium in H1FY26. As the segment leader, we aim for measured share growth while prioritizing profitability over expanding into loss-prone geographies or products.
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