The comments come as the health insurance industry faces medical inflation running at 13 to 14 percent annually, putting pressure on both insurers and policyholders.
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The company will also launch a new set of affordable health insurance plans this year, aimed at Tier 2 and 3 markets, which will come with a restricted hospital network.
“It will have what we call a preferred network of partners. It will have a limited network of hospitals with whom we have tighter relationships and pricing agreements. So if customers want to choose a lower premium, but have a limited network of hospitals, they can opt for that,” Roy said, adding that the plans will be distributed primarily through agents and digital channels.
The company, which recently reported its Q4FY26 earnings, saw its combined ratio improve to 95.7% from 98.4% in the same quarter last year, while its retail health premium grew nearly 20%, lower than the industry’s growth of around 29%.
While Roy attributed it to the grassroots effect, he added that the company is now also focusing on quality, rather than quantity, and is losing market share in certain markets, such as some parts of rural Maharashtra, Western UP and Gujarat, where cases of fraud and customer complaints are very high. Instead, they are focusing on southern markets like Telangana and Andhra Pradesh, where, according to Roy, growth has been very healthy.Also Read: Third Party Premiums Lead Auto Coverage Growth
In FY26, the company settled claims worth Rs 1,254 crore covering 1.8 crore in the region, a 24% YoY increase, while gross premium written in the two states grew 17% YoY to Rs 2,268 crore in FY26, while the number of policies increased from 8.8 lakh to 9.4 lakh.
At the enterprise level, Star Health expects further improvement in its combined ratio, driven by tighter hospital pricing agreements, improved underwriting and fraud controls, as well as operating leverage from technology investments.
“The investments we are making in technology should also significantly reduce our operating expenses. New hires may not be required to perform all of the automated services that will automatically generate profits. We also expect some improvement on the claims side due to the tighter pricing agreements, new products and fraud management tools we have implemented,” he added.
Roy also said that at the industrial level, efforts are also being made to address operational and pricing frictions. The Insurance Regulatory and Development Authority of India (IRDAI), along with the Confederation of Indian Industry (CII), is facilitating discussions between insurers and hospital chains to standardize treatment protocols and reduce disputes, although any form of direct price regulation remains unlikely in the near term.
“Hospitals badmouth insurance companies, insurance companies badmouth hospitals. All of that has to stop. All we are asking is to stop upselling just because a customer has insurance. This will increase insurance prices and reduce penetration,” Roy added.
The company also said that upcoming regulatory changes on commissions are unlikely to materially impact its business, given its largely retail-driven distribution model and existing cost discipline.
