India Ratings and Research (Ind-Ra) has upgraded Star Health and Allied Insurance Company's (Star) Long-Term Issuer Rating to 'IND AA+' from 'IND AA'. The outlook is 'Stable'.
Rationale
The upgrade reflects Star’s consistency in underwriting profits, maintenance of market share and leadership position within the industry, its large distribution network of agents, adequate solvency margin buffer supported by internal accruals, wider product basket under the health segment, multiple avenues to aid capital support for growth and during stress times, and stable profitability. The ratings also factor in a stable investment book and defined underwriting practices. The ratings remain constrained by Star’s single line of business and regulatory changes that might lead to increased competition from established players with a similar distribution franchise.
Key Rating Drivers
Strengths
- Sustained leadership position in health insurance and reasonable market share in general insurance (GI) space
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Wider distribution franchise through agent network
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Experienced management
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Investment book remains stable
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Established claim processing and underwriting practices
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Profitability buffers stable
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Capital remains adequate, with internal accruals building up
Weaknesses
Star commenced operations in 2006. It has a pan-India presence, with 887 branch offices, a network of 718,000 agents, cashless and reimbursement facilities, and over 15,133 network hospitals across India at end-June 2024. The key promoters are Safecrop Investments India LLP (Westbridge Capital) with a 40.4% stake and Rakesh Jhunjhunwala & family (17.3%).
To read Ind-Ra’s full report, please click here.