Star Health and Allied Insurance Company reported a 50% year-on-year (YoY) decline in its Q2 FY26 net profit, which dropped to ₹317 crore from ₹621 crore in the same quarter last year. The fall in profit was primarily attributed to higher expenses and the impact of new regulatory accounting norms introduced by the Insurance Regulatory and Development Authority of India (IRDAI).
Despite the earnings decline, gross written premium (GWP) for the July–September quarter rose 12% YoY to ₹4,421 crore, compared to ₹3,934 crore a year earlier, supported by steady growth in retail health policies.
However, management expenses increased sharply to 37.1% of gross direct premium, up from 31.1% in the corresponding quarter of the previous year, reflecting higher acquisition and operational costs.
The claims ratio showed a slight improvement at 69.6%, versus 72.8% a year ago, but this benefit was largely offset by elevated cost ratios and the adoption of the new IRDAI accounting policy. Under the revised rule, insurers must recognise premiums from long-term policies on a 1/n basis (where n is the policy term).
According to Star Health, this change led to a reduction in its reported gross written premium by approximately ₹4,494 crore for Q2 and ₹7,794 crore for H1 FY26. However, the company clarified that the adjustment had no material impact on overall profitability.
For the first half of FY26, Star Health’s net profit stood at ₹574 crore, compared to ₹1,087 crore in the same period last year.
The company’s solvency ratio remained strong at 2.15 times as of September 30, 2025, well above the regulatory minimum of 1.5 times.
In a separate disclosure, Star Health confirmed paying a ₹3.39 crore penalty to IRDAI earlier this year for non-compliance with cybersecurity guidelines, following an unauthorised data access incident in 2024.
