Star Health likely to see demand boom

THE FIRM IS HOPING THAT AWARENESS CREATED DURING PANDEMIC WOULD LEAD TO HIGHER DEMAND FOR INSURANCE

MUMBAI: Star Health & Allied Insurance Company Ltd., backed by billionaire Rakesh Jhunjhunwala, is relying on young people buying insurance cover and its hospital tie-ups to post profits that got pummeled by high claims during the pandemic.

While the omicron variant was still weighing on market sentiment, the health insurer is hoping the awareness created during the pandemic would lead to greater demand for insurance policies, Anand Shankar Roy, managing director of the Chennai-based firm told Bloomberg TV’s Haslinda Amin and Rishaad Salamat on Thursday.

Bulk of the demand is coming from the younger age group “which typically never used to think about health insurance,” he said.

The Covid-19 pandemic has infected more than 272 million and killed over 5.3 million globally, besides disrupting lives and livelihoods in the past two years.

“If you talk to me three years down the line, I believe we’ll be able to improve upon our market leadership and will be highly profitable because we have a network of more than 12,000 hospitals, many of whom have a network rate negotiated with us,” Roy added.

Investor concerns about profitability saw a subdued listing last week for the company on Indian bourses, with the firm paring its offer size to $848 million from the $975 million it sought. Shares are down nearly 9% from its issue price, with the stock trading at ₹809 as of 12:30 p.m. on Thursday, compared with its listing price of ₹900.

Jhunjhunwala and his wife Rekha own around 17.3% share in the company, according to the IPO filings. Star Health was the first major listing after Paytm‘s listing debut, which was also bogged down by valuation and profitability concerns among investors as caution started creeping in after a string of blockbuster IPOs of startups in 2021.