Star Health and Allied Insurance Company Ltd, on Wednesday, reported an 11.18% decline in its net profit for the second quarter of FY25 to Rs 111.29 crore compared to Rs 125.30 crore in the same quarter last year.
The decline in profitability comes on the back of challenges within the insurance industry, particularly due to shifting consumer behavior post-COVID, as noted by the company in its results.
The company’s revenue from operations, however, grew by 15.54% year-over-year to Rs 3,703.88 crore for Q2 FY25, as opposed to Rs 3,205.58 crore in the same quarter previous year.
The revenue growth was driven by increased sales, with the net earned premium (NEP) rising by 16% to Rs 3,704 crore, slightly above market expectations of Rs 3,667 crore.
The company’s share was trading with a 3.8% loss at Rs 516 apiece on Wednesday at around 1:20 pm.
Star Health’s combined ratio—a key measure of profitability in the insurance sector—stood at 101.06% for the first half of FY25, which is above the target level. The company indicated that achieving its FY25 guidance on the combined ratio may be challenging due to market conditions.
To address the pressures on profitability, Star Health management has signaled plans for price adjustments beyond their initial projections to reduce the impact of cost pressures and consumer trends.
Moreover, Star Health remains optimistic about achieving its premium income target of Rs 18,000 crore for FY25. The management anticipates a reduced impact from seasonal factors in the remaining quarters, given historical trends.
Meanwhile, the company cleared its Chief Information Security Officer (CISO), Amarjeet Khanuja, of any alleged wrongdoing in the data leak incident. The company gave the clean chit after conducting an independent forensic investigation and found no links between the threat actors and Khanuja over the data leak fiasco.