Star Health & Allied Insurance Co. Ltd. · NSE:STARHEALTH
Star Health & Allied Insurance — FY2022 Earnings Presentation
30 slides from Star Health & Allied Insurance's earnings presentation, May 1, 2022
Slide 1: Exchange filing cover letter for investor presentation
Date: May 01, 2022 Place: Chennai Ref: SHAI/B & S/SE/22/2022-23 To, To, The Manager The Manager Listing Department Listing Department BSE Limited National Stock Exchange of India Limited Phiroze Jeejeebhoy Towers Exchange Plaza, 5th Floor, Plot C/1, Dalal Street G Block, Bandra-Kurla Complex Mumbai
Slide 2: FY2022 Performance Review
FY2022 PERFORMANCE REVIEW April 2022
Slide 3: Agenda
Agenda 1 Our Strategy 2 Performance Update 3 Industry Overview 4 ESG: Strategy and Implementation Areas 2
Slide 4: Agenda
Agenda 1 Our Strategy 2 Performance Update 3 Industry Overview 4 ESG: Strategy and Implementation Areas 3
Slide 5: Key pillars of our Strategy
Key pillars of our Strategy 33% Retail Health INR ~115 billion 1 Leadership in Retail Health Insurance Market GWP with 22% Share growth Y-o-Y 24% CAGR in no. of 2 Well Spread Distribution Network agents since FY19 to 0.55 million 807 Branches INR 7.2bn GWP 60% premium value 3 Investment in Technolog
Slide 6: Agenda
Agenda 1 Our Strategy 2 Performance Update 3 Industry Overview 4 ESG: Strategy and Implementation Areas 5
Slide 7: Key Performance Indicators (1/2)
Key Performance Indicators (1/2) Particulars Fiscal Year Ended March 31, (INR millions, unless otherwise stated) 2020 2021 2022 GWP 68,651.4 93,885.4 1,14,634.7 Period-on-period growth of GWP 27.1% 36.8% 22.1% Retail Health Renewal Premium Ratio 94.5% 97.9% 94.0% Number of agents (in '000s) 360.6 46
Slide 8: Key Performance Indicators (2/2)
Key Performance Indicators (2/2) Claim, Expense and Combined Ratio Profit After Tax (PAT) (INR billion) PAT Adjusted PAT 122.1% 117.9% 33.1% 21.3% 93.4% 5.9 5.8 2.6 65.9% 65.8% 61.3% -10.9 -10.4 27.5% 27.7% 30.8% FY20 FY21 FY22 FY20 FY21 FY22 Adjustment impact Adjusted Loss Ratio Expense Ratio Note:
Slide 9: Leadership in Attractive Retail Segment
1 Leadership in Attractive Retail Segment Retail Health Market Share Gross Written Premium (INR billion) 183 204 263 307 115 CAGR 29% 94 31% 33% 26% 29% 69 54 101 FY19 FY20 FY21 FY22 82 Retail Health Industry Size in INR billion 58 47 Retail Health Accretion Market Share, FY22 1 6 1 9 1 10 2 12 FY19
Slide 10: Largest and Well Spread Distribution Network
2 Largest and Well Spread Distribution Network Total Agency Force Sponsored Health Agency Force In 000’s In 000’s 24.3% 41.5% 550 79 462 59 361 286 40 28 FY19 FY20 FY21 FY22 FY19 FY20 FY21 FY22 Channel wise Growth, FY22 FY22 80% 6% 6% 5% 4% Channel Mix 63% 23% 34% -3% 5% Corporate Individual Digital
Slide 11: Our Agency network effect gives us a sustainable flywheel
2 Our Agency network effect gives us a sustainable flywheel Best in class distribution - largest agency force Attract new and retain Volume existing leadership agents Bargaining Agents able power with to sell more hospitals - and earn Scale more economies Cost Potential leadership – Price Operating
Slide 12: Extensive Footprint and Alternate Distribution Channels
2 Extensive Footprint and Alternate Distribution Channels Extensive Branch Network Partner Integration 737 807 575 460 FY19 FY20 FY21 FY22 Well distributed footprint across enables Pan-India growth Focus on SME Group Health Sales INR billion 36% 39% 3.5 4.7 SME contribution FY21 FY22 11
Slide 13: Impressive Digital Growth
3 Impressive Digital Growth Digital Acquisition Digital Issuance GWP acquired through online channels, INR ‘billion % of premium collection 7.2 34% 56% 60% 5.4 Growth 36% 2.9 FY19 FY21 FY22 FY19 FY21 FY22 Hyper-personalization 1.5mn Digitizing Customer Customer App STAR POWER - personalized single d
Slide 14: Digital touches every facet — from pre-purchase to claims
3 Digital touches every facet — from pre-purchase to claims Pre Purchase Purchase – Agent and Customer app Service Claims - Reporting & MIS 13
Slide 15: Diversified and Specialized Product Suite
4 Diversified and Specialized Product Suite Key Products Star Cancer Care Policy Star Senior Citizens Red Carpet Health Insurance Policy Star Cardiac Care Policy Young Star Policy Star Diabetes Safe Policy ♀ Women Care Policy Retail Premium Mix for Specialized Products (%) Innovative Policy Coverage
Slide 16: Strong Domain Expertise Driving Superior Claims Ratio
5 Strong Domain Expertise Driving Superior Claims Ratio Net Incurred Claims Ratio(1) Increasing Sum Assured Fraud Analytics 94.4% 87.1% 33.1 21.3% 65.9% 61.3% 65.8% Higher share of Agreed Network Centralised Medical Underwriting Hospitals FY20 FY21 FY22 Adjustment impact Adjusted Loss Ratio Note: Ad
Slide 17: Extensive Claims Processing and Network Negotiation
5 Extensive Claims Processing and Network Negotiation Increased ANH(2) Share… Proportion of total cashless claims 7.5mn ~7 lakh Claims Settled Since Inception(1) Total Tele- 64% 55% Consultations 49% FY19 FY21 FY22 89% Largest Hospital network Cashless authorization< 2 hr 12K+ Network Valuable s
Slide 18: Financial Performance
6 Financial Performance Combined Ratio Opex/GWP Ratio 135.7% 122.1% 117.9% 10.3% 33.1% 21.3% 98.4% 93.4% 4.2% 94.2% 65.9% 61.3% 65.8% 63.9% 16.0 14.9 16.0 16.2 14.8 27.5% 27.7% 30.8% 31.2% 30.3% FY20 FY21 FY22 Q3FY22 Q4FY22 FY20 FY21 FY22 Q3FY22 Q4FY22 Adjustment Impact Loss Ratio Expense Ratio Prof
Slide 19: Robust Investment Performance
6 Robust Investment Performance Total Investments Assets Investment Income INR billion Investment Leverage INR billion 2.4 +87% 120 2.1x 2.5 100 1.9x 2.0 80 44% 1.5 60 114 7.9 1.0 -2% 40 68 4.2 20 43 0.5 2.9 1.8 1.8 0 0.0 FY20 FY21 FY22 FY20 FY21 FY22 Q3FY22 Q4FY22 Attractive Returns... …with fixed
Slide 20: Agenda
Agenda 1 Our Strategy 2 Performance Update 3 Industry Overview 4 ESG: Strategy and Implementation Areas 19
Slide 21: Indian Health Insurance: Highly Underpenetrated and Growing
Indian Health Insurance: Highly Underpenetrated and Growing Health Insurance Penetration(1) Gross direct premium as % of Nominal GDP - 2019 4.1% 2.3% 2.0% 0.8% 0.7% 0.4% US Germany World Median Argentina China India Overall Health Insurance Retail Health Insurance Market INR billion INR billion 18%
Slide 22: Standalone Players Continuously Gaining Share
Standalone Players Continuously Gaining Share SAHIs leading Industry Growth Due to Focus on Retail Health CAGR between FY15-22 % Market Share of Retail Health Insurance 32% 22% 20% 15% 51% FY2022 Market Share SAHI Private Industry PSU • Single product focus to better cater customer requirements 27%
Slide 23: Star Health enjoys Industry leadership
Star Health enjoys Industry leadership Retail Health Market Share 33% 10% 9% 7% 7% 7% 6% 5% Competitor A Competitor B Competitor C Competitor D Competitor E Competitor F Competitor G Number of Agents In‘000. FY22: 550k 534 173 134 100 95 86 58 56 Competitor A Competitor B Competitor C Competitor D C
Slide 24: Retail Health Insurance: Most Attractive Segment
Retail Health Insurance: Most Attractive Segment Lowest Claims Ratio …in Addition to Industry Claims ratio, FY20 Industry Claims ratio, FY21 with COVID impact More Convenient than Corporate Plans 73% 85% Higher Growth Rate Retail Retail Increasing Penetration Rising Customer Awareness 92% 120% Gover
Slide 25: Agenda
Agenda 1 Our Strategy 2 Performance Update 3 Industry Overview 4 ESG: Strategy and Implementation Areas 24
Slide 26: ESG: Strategy and Implementation Areas
ESG: Strategy and Implementation Areas Health Insurance is a Social business protecting Health and Wealth of Customers Strategic Pillars of ESG Environment Social Governance Undertake initiatives to Consistent work in areas To operate the business contribute to creating a of Healthcare, in Transpare
Slide 27: ESG: Strategy and Implementation Areas
ESG: Strategy and Implementation Areas Environment Social Energy and Water Saving Offering free telemedicine services for non- communicable diseases • LED lighting and energy efficient AC installations • 3/5 star rated appliances with regular maintenance Providing food to underprivileged persons in
Slide 28: ESG: Strategy and Implementation Areas
ESG: Strategy and Implementation Areas Governance Board Structure Data /Cyber Security 50% - Independent directors Enforcing leading practices and controls through effective Cyber 2 Women independent directors security Policy and Framework Evaluation framework for directors Risk Management Business
Slide 29: Thank You
THANK YOU Health Insurance The Health Insurance Specialist
Slide 30: Glossary
Glossary Particulars FY Financial Year GWP Gross Written Premium CAGR Cumulative Annual Growth Rate Y-o-Y Year-on-Year VQST Voluntary Quota Share Treaty URR Unexpired Risk Reserve ANH Agreed Network Hospitals PA Personal Accident SME Small and Medium Enterprises TAT Turn Around Time 29
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