Star Health and Allied Insurance is preparing for mid-to-high single digit premium hikes in FY27 as healthcare expenses continue to rise. According to reports from The Economic Times, MD & CEO Anand Roy stated that customers are willing to absorb these increases given the rising cost of healthcare. The company faces medical inflation running at 13-14% annually, creating pressure on both insurers and policyholders.
Star Health is launching a new set of affordable health insurance plans this year, specifically targeting Tier 2 and Tier 3 markets. As reported by The Economic Times, these plans will feature a restricted hospital network with preferred partners having tighter pricing arrangements. Roy explained that customers seeking lower premiums can choose this option with a limited network of hospitals. The plans will be distributed primarily through agents and digital channels.
The company recently reported strong Q4FY26 results with its combined ratio improving to 95.7% from 98.4% the same quarter last year. According to The Economic Times, retail health premium grew nearly 20%, though this was lower than the industry's growth of around 29%. The company settled claims worth ₹1,254 crore covering 1.8 lakh claims in the south region, representing a 24% year-on-year increase.
Star Health is strategically focusing on quality over quantity, letting go of market share in certain regions with high fraud instances. As reported by The Economic Times, the company is focusing on markets in the south like Telangana and Andhra Pradesh, where growth has been healthy. The gross written premium in these two states grew 17% YoY to ₹2,268 crore in FY26, while the number of policies increased from 8.8 lakh to 9.4 lakh.
The company expects further improvement in its combined ratio through tighter hospital pricing arrangements and technology investments. According to The Economic Times, Roy noted that upcoming regulatory changes on commissions are unlikely to materially impact the business due to its retail-driven distribution model. He also highlighted ongoing industry efforts through IRDAI and CII to standardise treatment protocols and reduce disputes between insurers and hospitals.
