Star Health & Allied Insurance Co. Ltd. · NSE:STARHEALTH
Star Health & Allied Insurance — Investor Day (June 2024)
73 slides from Star Health & Allied Insurance's investor day presentation, Jun 27, 2024
Slide 1: Exchange cover letter: Update on Analyst/Institutional Investor Meeting
Date: June 27, 2024 Place: Chennai Ref: SHAI/B & S/SE/63/2024-25 To, To, The Manager The Manager Listing Department Listing Department BSE Limited National Stock Exchange of India Limited Phiroze Jeejeebhoy Tower Exchange Plaza, 5th Floor, Plot C/1, Dalal Street G Block, Bandra-Kurla Complex Mumbai
Slide 2: Details of group meet with Investors/Analysts – June 27, 2024
Annexure - 1 Details of group meet with Investors/Analysts – June 27, 2024 Sl. No Fund/Firm 1. Ambit 2. CLSA 3. UBS 4. Axis 5. Haitong 6. HDFC Securities 7. Citi 8. Nuvama 9. BNP Paribas 10. JM Financial 11. HSBC 12. InCred 13. B&K Sec 14. Avendus Spark 15. Investec 16. Motilal Oswal 17. IIFL 18. IC
Slide 3: Analyst and Investor Day
Analyst and Investor Day Anand Roy, MD & CEO STAR Health and Allied Insurance 27th Jun 2024
Slide 4: Star Health Journey
Star Health Journey Overall Business Performance Gross Written Premium (in Cr) 22% CAGR 15251 FY20 →FY24 No.1 Stand Alone Health Insurance Company* 12951 11462 17Cr + Lives covered from inception 9353 6862 1 Crore Claims settled since inception (Count) 5413 4160 2963 2008 1470 502 770 1097 22 42 95
Slide 5: FY 24 - Key Highlights
FY 24- Key Highlights Strong Growth Market Leader PAT Growth 18 % 33.1% 845 Cr Registered higher than industry 37% PAT Growth STAR is market leader with 33.1% growth in FY 24 in GWP Market Share in retail health Credit Rating Highest DJSI Score STAR Health App AA+ 43 5 Mn+ Downloads STAR health’s ha
Slide 6: Ranked No.7 in Non-life Insurer (FY24)
Ranked No.7 in Non-life Insurer (FY24) S.No. Insurers GWP (Cr) FY23 S.No. Insurers GWP(Cr) FY24 #1 The New India Assurance Co Ltd 37035 #1 The New India Assurance Co Ltd 34487 #2 ICICI Lombard General Insurance Co Ltd 21025 #2 ICICI Lombard General Insurance Co Ltd 24776 #3 United India Insurance Co
Slide 7: Retained No.2 position in Health Segment (FY24)
Retained No.2 position in Health Segment (FY24) Health GWP (Cr) Health GWP(Cr) S.No. Insurers S.No. Insurers FY23 FY24 #1 The New India Assurance Co Ltd 16682 #1 The New India Assurance Co Ltd 18321 #2 Star Health & Allied Insurance Co Ltd 12757 #2 Star Health & Allied Insurance Co Ltd 15039 #3 The
Slide 8: STAR is No.1 Stand Alone Health Insurer (FY24)
STAR is No.1 Stand Alone Health Insurer (FY24) S.No. Insurers GWP (Cr) FY23 S.No. Insurers GWP(Cr) FY24 #1 Star Health & Allied Insurance Co Ltd 12951 #1 Star Health & Allied Insurance Co Ltd 15251 #2 Care Health Insurance Ltd 5142 #2 Care Health Insurance Ltd 6864 #3 Niva bupa health insurance comp
Slide 9: Robust organization for delivering results
Robust organization for delivering results Sales & Distribution 880 +880+ 1150+ 8500 + 2000+ Tele Callers Partnerships Servicing 572 44 58 14 15000+ 30000+ 550+ 400+ Healthcare Provider Qualified Customer Direct Banks Corporate NBFCs/ HFCs Employees Network Footprint Medical Service agents Brokers A
Slide 10: Financial Performance- Growth with Profit
Financial Performance- Growth with Profit Retail health GWP (Cr) & Market share PAT Growth QoQ in Cr 37% 1 6 0 0 4 0 . % 845.0 32.9% 33.7% 33.1% 31.3% 1 4 0 0 3 5 .0 % 28.1% 13,951 618.6 1 2 0 0 3 0 . % 25.5% 11,950 1 0 0 2 5 .0 % 10,129 38% 8 0 0 2 0 . % 35% 8,243 287.9 289.6 40% 35% 6 0 0 1 5 .0 %
Slide 11: Future Growth Trajectory
Future Growth Trajectory Where we are today… Where we want to be in next 4 years…. • INR 15,251 Cr GWP • INR 845 Cr PAT Engines of Growth Competitive Advantage By FY 28 Agency GWP –~INR 30,000 Cr Cost Leadership (2X) BANCA Un parallel PAT – ~INR 2500 Cr (3X) distribution Corporate Best in class in h
Slide 12: STAR - Core Values
STAR - Core Values Customer Innovation Transparency Centricity
Slide 13: Customer Centricity at Core of Strategy
Customer Centricity at Core of Strategy Ease of Insurance Illness to Wellness through smarter Journey underwriting practices Comprehensive OPD Customer Coverage focusing Product Innovation Centricity Wellness Services Omni Channel Superior Digital Claim Customer Support Experience NPS
Slide 14: NPS- Customer
NPS- Customer Star Health is placed 2nd amongst all other SAHIs.* NPS Score (%) 61 56 56 55 SAHI 1 STAR HEALTH SAHI 2 SAHI 3 *Based on an external survey done by Kantar. On a total Sample size of 3138 health insurance customers across 8 major cities (dated: April ‘24)
Slide 15: Holistic Approach to Growth
Holistic Approach to Growth 1 Expanding boundaries of Health • 43% Retail Health GWP from Semi-Urban & Rural insurance Professional culture and nurturing • Best in Retention of talent (>90% for AVP & above) 2 • Gender Diversity 78 :22 (Male : Female) talent • STAR Aarogya Digi seva centre – positive
Slide 16: Insurance Awareness Campaigns
Insurance Awareness Campaigns
Slide 17: Insurance Awareness Campaigns
Insurance Awareness Campaigns
Slide 18: Insurance Awareness Campaigns
Insurance Awareness Campaigns
Slide 19: CSR activities
CSR activities Aarogya Digi seva centre – Activities in Tamil Nadu
Slide 20: Composite License: Prima facie it is an attractive opportunity for us
Composite License: Prima facie it is an attractive opportunity for us Strong customer need adjacency, e.g., life risk Faster time to scale by leveraging proprietary distribution for Cross/up-sell to existing customers Greater activation and engagement of agents through broader product portfolio à gr
Slide 21: Investor and Analyst Day: Underwriting & Claims
Investor and Analyst Day Underwriting & Claims Amitabh Jain , COO
Slide 22: Impact of Master Circular on IRDAI (Insurance Products) Regulations
Impact of Master Circular on IRDAI (Insurance Products) Regulations Key Changes – Product STAR’s Impact on Existing Opportunity to improve Readiness Business Customer exp Opportunity to have the member CIS to be provided to CIS to be provided to every policy 1 holder of Individual Insurance policies
Slide 23: Impact of Master Circular on IRDAI (Insurance Products) Regulations
Impact of Master Circular on IRDAI (Insurance Products) Regulations Key Changes – Product STAR’s Impact on Existing Opportunity to improve Readiness Business Customer exp We have already initiated auto Grace Period Cancellations: 15 days for monthly instalment 5 payments and 30 days for quarterly, h
Slide 24: Impact of Master Circular on IRDAI (Insurance Products) Regulations
Impact of Master Circular on IRDAI (Insurance Products) Regulations Key Changes – Product STAR’s Impact on Existing Opportunity to improve Readiness Business Customer exp Final Approval: Final authorization to be provided within Plans in place to comply by Jul-24 9 Three hours of the receipt of disc
Slide 25: Emphasis on Customer Centricity
Emphasis on Customer Centricity 1 Enhanced Underwriting Customer Centricity 2 3 Digital Claims Illness to wellness- processing Active engagement
Slide 26: Enhanced Underwriting
Enhanced Underwriting Proposal Risk Scoring Model Loss Ratio Prediction Model • Risk Scoring AI Model to bucket the Proposals into High, Propensity to claim model predicts expected ULR of the Medium & Low Risk. business underwritten. • Risk Scoring and Categorization based on several Factors Conside
Slide 27: Product Innovations – Coverage for all
Product Innovations – Coverage for all Senior Citizen Red Carpet Women Care Specifically designed for 60+ Specific to women health & care Young Star Micro Rural & Farmers Care Designed for younger population For Rural population Diabetes Safe Special Care For people with Diabetes For people diagnose
Slide 28: Claims Digital Transformation Initiatives
Claims Digital Transformation Initiatives Tariff & Bill Digitization Intelligent Character Recognition / Optical Character Recognition Data driven Fraud analytics and prevention Mechanism Customer App – Enhancements in Claims Module Fraud Score Model for judicious Claims Processing Implementation of
Slide 29: Illness to Wellness journey - Active Engagement
Illness to Wellness journey -Active Engagement Chronic illness Customers Healthy Customers • Prevent re-admission • Wellness Programmes • Condition Management • Vaccination drives • Home Health Care • Immunization drives • Digital tools ~3x Increase PHC Utilization FY23 → FY24 Care Continuum 1.45x I
Slide 30: Technology Driven Wellness
Technology Driven Wellness App Features Face Scan Telemedicine Consultations Health Records management Health Risk Assessment Wellness Programs Delivery • Diabetes Management • Hypertension Management • Weight Loss Management ABHA ID Generation
Slide 31: Analyst/Investor Meet Chennai – Jun-24
Analyst/Investor Meet Chennai – Jun-24
Slide 32: Agenda
Agenda 1 Financial Performance 2 Regulatory Changes - Finance 3 IFRS/Ind AS update & RBC 4 RoE - Contributors 5 Reinsurance – Profit pool 6 Cost Leadership
Slide 33: Financial Performance
Financial Performance Star Health - Financial Performance 122.1% 117.9% 96.7% 92.9%93.4% 95.3% 94.4% 87.1% 65.9% 66.5% 62.7% 65.0% 30.8% 27.7% 30.3% 30.2% 30.2% 27.5% CoR Loss ratio Expense Ratio FY19 FY20 FY21 FY22 FY23 FY24 Loss ratio maintained around 65-66% level except Covid period Improvem
Slide 34: Regulatory Changes – Long term policies
Regulatory Changes – Long term policies Gross Written Premium reported for any Financial Year shall be the total Gross Written Premium due for the Long-Term Policy multiplied by ‘1/n’, where ‘n’ is the Policy Duration Payment of commission in a year shall be only on the gross written premium rec
Slide 35: Ind AS (IFRS) and RBC
Ind AS (IFRS) and RBC Ind AS (Converged with IFRS) is an internationally recognized as a set of accounting standards that enhance transparency, comparability, and reliability of financial statements Enhanced transparency: Ind AS provides a robust framework for financial reporting, ensuring greater
Slide 36: Ind AS – IFRS 17 changes
Ind AS – IFRS 17 changes Amortisation of acquisition cost over the period of the Contract Separate valuation for Re-insurance contract.
Slide 37: Ind AS 109 - Investment
Health Insurance Ind AS 109 - Investment Along with Ind AS 117, the Company will need to (Classification of equity instruments consider the implications of Ind AS 109 on Financial — Instruments which will have a bearing on the Company's Asset Liability matching. Expected Credit Loss (ECL) impairment
Slide 38: IFRS PnL
IFRS Pnl Rs crores Particulars FY2023 FY2024 Profit as per IGAAP 619 845 RoE as per IGAAP 12.5% 14.4% IFRS Adjustment Lease and Security Deposit -0.7 -0.7 Deferred Expense on Procurement Cost 162.2 213.7 Unrealised Gain / (Loss) on Investments 21.1 103.5 Provision - Expected Credit Loss (ECL) -2.0 -
Slide 39: Strong Solvency & Risk Based Capital
Strong Solvency & Risk Based Capital Solvency for Star Health as on 31st Mar-24 – 2.21x Sub debt as a means to augment Capital base – ~ Rs 3000 crores eligibility Current Solvency is factor based as a multiple of Premiums or Claims RBC Total Balance Sheet Approach Principles for Valuation
Slide 40: ROE- Contributors
ROE- Contributors Scenario 1 Scenario 2 Post-tax ROE Pre-tax ROE Post-tax ROE Pre-tax ROE 21% 28% 17% 23% Underwriting Investment Underwriting Investment leverage result leverage result Underwriting Investment Underwriting ROE Investment ROE ROE ROE 11.5% 17% 6.5% 16.5% Claims Investment ratio 65% I
Slide 41: Profit pools - Reinsurance (RI) - Obligatory
Profit pools - Reinsurance (RI) - Obligatory Trend of Obligatory Reinsurance in India OBLIGATORY REINSURANCE 20% 15% 10% 5% 4% UPTO 2007 UPTO UPTO UPTO 2006 2012 2021 FY25 Obligatory Reinsurance has reduced from 20% to 4% in FY23 over more than 12-13 years SAHI’s should be allowed to negotiate R
Slide 42: Cost Leadership
Cost Leadership Tech Upgradation led Automation & Process Re- Productivity increase Centralization engineering TCS BANCS implemented Elimination through Implementation and Automation - Policy print, centralization of Claim forms, renewal notice Procurement System Centralization of Consolidation of B
Slide 43: Cost leadership - Modernized Payment Suite
Cost leadership -Modernized Payment Suite Rs crores Convenience fee Credit Card MDR charges reduction from 1.0 1.0 Banking partners 0.9 Charge to the customer Reduction in CC collections Mar-24 Apr-24 May-24 BNPL 34.6 Promote Long term products 15.0 11.8 14.1 Improve Investment leverage 10
Slide 44: Analyst Day 27th June 2024
Analyst Day 27th June 2024
Slide 45: Our focus and investments in digital space is continuously growing
Our focus and investments in digital space is continuously growing and generating immense value for our all stakeholders; customers, hospitals, distribution channels and business operations.
Slide 46: Star Product & Engineering
Star Product & Engineering Developers 96 Data Scientists Testers 11 36 Product Team Cloud Engineers 25 16 Project Managers Data Engineers 31 20 Partner Engineers Data Analysts 252 19
Slide 47: Cloud, data and API driving the next level of business agility and growth
Cloud, data and API driving the next level of business agility and growth CLOUD DATA API High agility, availability and Fuel for future growth Monolithic to API driven scalability Objective data driven business development Lower turn around time to decisions Highly reusable components experiment Lar
Slide 48: Our Cloud strategy is enabling the business functions to experiment
Our Cloud strategy is enabling the business functions to experiment, measure and improvise in no time Launch fast, Fail faster & Rise
Slide 49: Cloud & SaaS, an interesting journey well taken since Year 2018
Cloud & SaaS, an interesting journey well taken since Year 2018 2018 2019 2020 2021 2022 2023 2024 0% Adoption 10% Adoption 10% to 96% Adoption Journey 1% Adoption Year of cloud Year of experiments with Year of launch of critical Continuous migration of business critical strategy building. small and
Slide 50: This journey has resulted into unprecedented business benefits
This journey has resulted into unprecedented business benefits … Agility, Availability & Scalability Lower TAT Observability Inbuilt Security Ease of deployment and Enabling business and Enhanced visibility on Advanced tools to maintenance of engineering function to workload performance keep
Slide 51: Containerization strategy over cloud brought in great ease
Containerization strategy over cloud brought in great ease in software development and deployment process ! Improved Development Process Operational Excellence Reduction in deployment overhead Cost effective due to less resource Better control over security risks intensive Continuous integra
Slide 52: Further leveraging cloud native services to reduce incidents
Further leveraging cloud native services to reduce incidents and enhance services reliability CI / CD DevOps DevSecOps Auto Scaling Develop, Integrate and Early threat detection No need to block and reserve Deploy at ease the instances Fix before it gets Completely automated deployed to
Slide 53: Cloud & SaaS empowering the D2C sales
Cloud & SaaS empowering the D2C sales Personas Digital Medium Lead Funnel Sales 38 Male Wellness Conversion Tier 2 Blog Telesales (Assisted) Star Health Website for 32 Female Social Media Lead Capture Tier 3 Paid Ads Lead 61 Male Video Allocation Tier 1 Marketing powered by Not Zoho CRM Converted Ma
Slide 54: We trust data more than anything else
We trust data more than anything else Fuelling data driven growth for the next decade
Slide 55: Internet Data Landscape
Speed and volume of data generated today is enormous … Internet Data Landscape 2021 To 2024 Source: https://financesonline.com/
Slide 56: Our journey of 4 years of data engineering
Our journey of 4 years of data engineering is super enriching and fulfilling … 2020 2024 Limited Data Source/Points(s) Propriety Datawarehouse IN-HOUSE AZURE INFINITE 20 + SOURCE DATA LAKE SCALABILITY APPLICATIONS Non-scalable technology PLATFORM Initial use cases; De-duplication, fraud dete
Slide 57: Data engineering and data science capabilities
Data engineering and data science capabilities DATA ENGINEERING Data Pipelines, Data transformation and use case based data massaging REGULATORY REPORTING & DATA ANALYTICS & COMPETITIVE VISUALISATION BENCHMARKING BI Tool, Interactive Dashboarding, Regulatory reporting & Visualizing data & trends. co
Slide 58: Customer facing renewal journeys built over data engineering platform
Customer facing renewal journeys built over data engineering platform Renewals Digital Capability IVR On call Self use Automated Assisted conversion customer web reminders digital journey support through applications for renewals renewals for instant agents renewals ML Renewal propensity models depl
Slide 59: End to end digitally assisted journey for renewals
End to end digitally assisted journey for renewals … IVR voice assisted parallel browsing renewal journey
Slide 60: Claims fraud prevention capability built over data engineering platform
Claims fraud prevention capability built over data engineering platform Customer and hospital deduplication Decision Matrix capabilities in for anomaly detection Claim processing enabling claim processors to take data driven Deduplication Outcome decisions PED Declared Risk Deleted 50+ Anomaly detec
Slide 61: Machine learning models enabling the sales and operational excellence
Machine learning models enabling the sales and operational excellence Holistic Claim Score Model Heuristic Risk Scoring Model To predict the likelihood of a claim being To forecast the likelihood of a new denied and determine the appropriate policy giving in high-value claims settlement amount (high
Slide 62: API and modern tech stack is turning out to be great business enabler
API and modern tech stack is turning out to be great business enabler !
Slide 63: API supporting the digital ecosystem
API supporting the digital ecosystem Ready generic Monthly, API stack for Quarterly and Multi payment all Group and Half Yearly EMI options through Retail Insurance options Partner API Product via Partner API Distribution Capability through API Partner API Rate limit and Custom Partner layer for sec
Slide 64: ABDM - NHCX Integration (Certification Complete) – API Stack
ABDM - NHCX Integration (Certification Complete) – API Stack Star Health has chosen Claim Book as Hospital Application Both Star Health (Insurer/ Payer) and the Claim Book (Provider) has been registered in NHCX platform Star customer App live with ABHA Id creation journeys NHCX stack is in t
Slide 65: Platform Capability
Custom built Document Decision Management System Management System on AWS Enterprise SSO, Customer Platform UW & Claims Platform Profile System Capability API Cloud Master Data Management Distribution API Platform API
Slide 66: GenAI Strategy
GenAI Strategy Building capability to be future ready! Customer Experience Operational Efficiency Greater Insights
Slide 67: GenPro – Virtual Assistant trained with LLM
GenPro – Virtual Assistant trained with LLM leveraging data of largest Health Insurance Data Set Enabling virtual assistance to doctors and paramedics to process claims faster through OpenAI LLM models built on Azure Cloud.
Slide 68: Star Customer App – AI powered tech for health assessment
Star Customer App – AI powered tech for health assessment To measure vital health parameters for users and gamify app usage Configuration settings to limit the usage of Face-scan for customer and non-customer. Biomarkers include blood pressure, heart rate, oxygen saturation, breathing rate, sympathe
Slide 69: Star Customer App
Star Customer App
Slide 70: Customer App Adoption Oct ‘23 to Mar ‘24
Customer App Adoption Oct ‘23 to Mar ‘24 Play Store Rating MAU Growth 01 04 4.4Blood Heart 73% Rate Pressure 02 Download Growth 05 Oxygen Saturation (SpO2) 85% 03 App Store Rating Health Rate Stress Level Variability 4.6 DAU Growth 81%
Slide 71: D2C Business Enablers
01 04 Heart Blood Rate Pressure D2C Business 02 05 Enablers 03 Health Rate Stress Level Variability
Slide 72: SLAM 3.0 (Smart Lead Allocation Module)
SLAM 3.0 (Smart Lead Allocation Module) Agent QA & Performance Integration of Marketing Quality Language Scores Match Intelligence, User profile and Agent Profile to build smart Buying Propensity 3.0 Lead Language match system provides most efficient sales process Marketing Online behavior Attribute
Slide 73: Thank You
Thank You
Star Health and Allied Insurance Company — Investor Day (June 2024) on 6ix