Star Health On Track To Achieve 15–16% ROE Target By FY28: CFO
Kambli said that to improve operating profitability, the expense ratio has to be controlled, for which the company is making efforts.
Star Health and Allied Insurance Company expects to maintain a return on equity (ROE) of 15-16% or higher by FY28, CFO Nilesh Kambli said on July 30. Speaking to NDTV Profit, Kambli explained that while claims and combined ratios may vary due to multiple factors, the company is focused on sustainable profitability.
“We see that claim ratios will be a function of pricing by healthcare providers, by the company, and a mix of retail and group, as well as indemnity and benefit products. So, there are various factors that will play out. What we are saying is that we want to maintain an ROE target upwards of 15–16% over the next two years, by FY28. That's our stated objective, and we are well on course to achieve that,” Kambli said.
He added that in order to improve operating profitability, the expense ratio has to be controlled, for which the company is making efforts.
“As a measure to improve operating profitability, the expense ratio has to be controlled. A lot of effort is going into it. Claims ratio can be slightly cyclical as well as a function of the various product makes and the integrative benefit, all those segments of the business. But the objective is to ensure a healthy ROE of 16% and above consistently,” he added.
According to Kambli, the company has maintained a 33% annual market share, driven by the strength of its agency network and digital platform.
“So, as we see for the quarter last year, we have been holding our market share at 33% on an annual basis for quarter one. With the scale we have built through our agency base and digital business, we believe we will hold on to our market share and continue improving it. However, in areas we want to focus on, we don’t want to go all out,” he explained.
While acknowledging rising competition, particularly through portability-driven growth, he noted that portability accounts for only 10% of Star Health’s new business. Kambli reiterated that the leading health insurer remains focused on quality growth.
“We believe India is a hugely under-penetrated market with vast opportunities. A significant portion of our business comes from tier 2 and tier 3 cities, where we are market leaders across almost all states. This leadership is due to our strong agency workforce, investments in digital and continuous product innovation,” he commented when asked about the impact of competition.
In Q1FY26, Star Health Insurance reported a return on equity (ROE) of 4.9%, up from 3.8% in Q1FY25 (non-annualised). Profit after tax (PAT) rose 44% to Rs 438 crore compared to Rs 304 crore in the year-ago period. The company achieved a Gross Written Premium (GWP) of Rs 3,936 crore for the quarter ended June 30, 2025, marking a 13% year-on-year growth (on a 1/N basis) from Rs 3,476 crore.
Shares of Star Health and Allied Insurance Company closed 4.55% higher at Rs 446.15 apiece on the NSE. In comparison, the benchmark Nifty50 settled at 24,855.05, up 0.14%.
