Star Health Insurance shares fall 4% after net profit nearly wiped out in Q4

Star Health and Allied Insurance Co Ltd, India’s largest standalone health insurer, reported a sharp 99.7% drop in its net profit for the fourth quarter of FY25, weighed down by rising claims and underwriting losses.

The company posted a net profit of ₹0.5 crore for the quarter ended March 31, 2025, down from ₹142.3 crore in the same period last year. Net earned premiums for Q4 rose 11.9% year-on-year to ₹3,798.3 crore, compared to ₹3,395.3 crore in Q4 FY24.

However, the company reported a substantial underwriting loss of ₹275.2 crore, a significant increase from the ₹91.8 crore loss in the corresponding quarter of the previous year. Despite this, operating profit remained stable, at ₹86.9 crore, slightly down from ₹90 crore a year ago.

For the full fiscal year FY25, the company reported Gross Written Premium (GWP) of ₹16,781 crore, marking a 10% growth from the previous year. Profit after tax (PAT) for FY25 stood at ₹787 crore (IFRS).

Anand Roy, MD and CEO of Star Health, commented: "Star Health continues to lead the retail health insurance space with strong growth in new business and a commitment to expanding our reach across India, especially in semi-urban and rural areas. Despite challenges such as rising healthcare costs, we remain focused on enhancing our claims service and providing affordable coverage to millions of Indians.”

Star Health’s solvency ratio remained healthy at 2.21x, well above the regulatory minimum of 1.5x, reflecting its strong financial position. The company also highlighted that it had covered 2.3 crore lives and settled health claims worth ₹10,350 crore during the year, with specialized treatments in areas such as orthopaedics, cardiology, cancer, and gastroenterology.

The insurer's distribution network saw robust growth, with a 11% increase in agent strength, bringing the total to more than 7.75 lakh agents. Approximately 51% of the lives covered came from semi-urban and rural areas, with 60% of claims settled from these regions.

Star Health’s performance came amid rising industry-wide healthcare inflation and increasing claims incidents. Its combined ratio for FY25 stood at 101.1%, compared to 97.2% in FY24, reflecting the industry's rising claims burden.

Shares of Star Health closed largely unchanged on Tuesday ahead of the earnings release. The company is listed on both the Bombay Stock Exchange and the Stock Exchange.