The Hindu Business Line : Star Health plans to invest Rs 180 cr

Addressing a press conference, Mr V. Jagannathan, Chairman and Managing Director, Star Health Insurance, said that the company would “more than double” its premium income to Rs 1,000 crore this year and would, therefore, require additional capital infusion. The company had underwritten about Rs 440 crore till September end.

About Rs 100 crore will be invested in December and another Rs 80 crore by March 2010, taking the total invested capital to Rs 310 crore, he said. The investments would be brought in by promoters of the company.

Mr Jagannathan said that underwriting group health insurance is still risky because of severe competition among insurers as premiums are offered to companies at discounted rates. Therefore, Star Health has refrained from pitching for this business. Currently, about 80 per cent of premium comes by providing various Government health insurance schemes and the rest from the retail business.

Govt schemes

“In two years, we expect half our premiums to come from the retail segment,” he said. Although the overall claim was at 63 per cent, the claims from the Government-funded health insurance schemes are about 110 per cent. Though the Government health schemes look like a loss-making proposition, Star Health posted a 200 per cent jump in gross profits, at Rs 5.2 crore in 2008-09.

The company is able to report profit as the Government schemes have adequate reinsurance coverage, he said.