Star Health Backs Reforms, Seeks Expense Cap Clarity

Star Health and Allied Insurance Co. Ltd has expressed general support for the Insurance Regulatory and Development Authority of India's (Irdai) proposed distribution reforms. The company believes it has a clear strategy to meet the proposed limits on expenses of management (EoM).

However, Star Health has urged the regulator to exclude products mandated by regulation, such as motor third-party insurance and government-sponsored health schemes, from the calculations determining expense caps. The insurer argues that including these low-cost business lines distorts the actual expenses incurred in selling retail policies.

Anand Roy, the company's managing director and chief executive, highlighted that other reform proposals are encouraging, particularly linking agent commissions to renewal rates. He believes this measure will disincentivize commission-driven policy churn across the industry. Star Health's business model, with over 90% of retail business coming from its own agents and direct-to-customer channels, is seen as resilient to these changes.

These comments follow Star Health's strong financial performance, with its September-quarter profit more than tripling year-on-year to ₹265 crore. The company also achieved an underwriting profit of ₹99 crore, a significant improvement from the previous year's loss. Star Health also added 39,000 agents, expanding its network to 8.7 lakh agents, as individual agents are expected to benefit under the new framework.