Strong execution turnaround; margin gains offset by share loss

UW result ₹111 Cr vs ₹16 Cr Q1 FY26; CISR improved 1.7% to 97%

94% new-to-insurance vs 90% Q1 FY26; fresh GWP +37-35% YoY

Market share fell 31% → 29%; management cited long-term policy mix & prudent underwriting

D2C fresh business +142% YoY; 74% of digital, 98% new-to-insurance; scale-up confirmed

Management noted 'huge scale-up' quarter-to-quarter; claims settled via TM unquantified

Management specified insurance revenue will reach 15-16% as long-term policy earned premium mix normalises; prior quarter call did not quantify this

Fourth consecutive quarter of improvement confirmed; management clarified 30-40 bps continuous expense ratio improvement from tech (not loss ratio), refusing to guide loss ratio forward

Voluntary quota share treaty fading; GICRE obligatory negotiations ongoing; cost guided 0.5-0.6% for FY27-28 vs ~0.9% FY26

Market share 29% (down 2pts YoY) attributed to long-term policy reporting mix and disciplined portfolio focus; no recovery guidance given, characterized as 'clean like-for-like by FY28'

Gap will close to 15-16% as long-term policies are earned over 2-3 years; gradual increase expected through quarters.

360-degree approach: portfolio quality, repricing, portfolio selection, claims management, network management, wellness, telemedicine scale-up. All contributing incrementally to sustained improvement.

Huge scale-up achieved quarter-to-quarter; management did not provide a specific number or prior comparison.

Some moderation in growth rates will happen for entire industry; Star Health will continue focused, disciplined strategy and aim to sustain fresh business share even if absolute growth rate moderates.

Continuing annual pricing strategy justified product-by-product via actuarial evaluation; benefits to non-claimants via discounts.

Management declined to quantify by component; emphasized 360-degree approach (repricing, portfolio selection, fraud control, wellness, telemedicine) with all elements contributing.

Mid-to-high teen ROE; glide path evident over last 3-4 quarters; no specific number given.

Will await regulatory guidelines before commenting; Star Health already operating within expense management limits.

Voluntary quota share treaty (2023-25) is fading; obligatory GICRE negotiations ongoing; reinsurance cost as % of business will decline through year.

Set calendar based on last pricing date; most pricing action in Q4 over past couple of years; earned premium impact plays out subsequent quarters via grace period.

Employee cost split three ways: claims-related → claims, sales-related → acquisition, support services → other expenses.

Insurance revenue growth will be 15-16% throughout year; increasing further in FY28 as long-term policy mix effect diminishes.

Fresh share ~20-80 split; increasing gradually as long-term policies are recognized over 2-3 years; fresh growth strong but not immediately recognized in revenue.

Some improvement from group, but retail loss ratio also improved; group now small enough that overall loss ratio 'more representative of retail book.'

GST input credit was available on operating expenses last year, not this year (20% YoY increase); annual rate hikes also affect.

Long-term business ~40% of fresh retail premium.

Will not comment on proposed regulation; Star Health 90% proprietary distribution puts it at advantageous position; already operating within regulatory norms; will comment after regulations are out.

Pricing based on quality of book and expected loss ratios; will be maintenance-oriented; no knee-jerk reactions; rhythm throughout year.

Hopeful trajectory will continue; performed well vs legacy book and strategies over two years; work-in-progress, not a destination.

Senior citizens hardly under 5% of overall book; focus on younger cohorts.

Unwind of long-term policies will offset high base; sustainable, focused model will continue; not chasing growth for sake of it.

Expected convergence as long-term policy earned premium mix normalises; Q1 13.4% lagged due to mix; gradual acceleration through year.

Glide path evident over last 3-4 quarters; no specific number given; normalization of investment yield at 8% underpins normalised PAT.

From ongoing tech and digitization investments, efficiency, productivity gains; expected consistently over years.

Market share fell 31% to 29% YoY; management attributes to disciplined portfolio focus and long-term policy mix, not competitive loss. But if competitors gain share while Star pursues profitability over growth, market leadership could erode.

100bps YoY loss ratio improvement ('fourth consecutive quarter') is credible, but analyst skepticism on magnitude persists. If back-book deterioration accelerates or telemedicine benefits plateau, loss ratio gains could stall or reverse at ~68% retail level.

Insurance revenue growth 13.4% lags GWP 19%; convergence to 15-16% dependent on long-term policy earned premium recognition over 2-3 years. If fresh growth moderates post-GST waiver in H2, absolute revenue growth could dip below guidance.

Commission and claim reforms under regulatory discussion; Star Health has 90% proprietary distribution advantage, but if reforms cap commissions or require alternative structures, acquisition costs could spike despite efficiency gains.

Q2 (Jul-Sep) typically sees vector-borne disease spike (dengue, malaria); management acknowledged Q2 'generally is a higher loss ratio' but expects telemedicine to mitigate. If outbreak larger than expected or telemedicine effectiveness lower than assumed, claims could surge.