Health insurance industry expands market share, yet concerns arise for Star Health Insurance

Star Health Insurance, the largest standalone health insurance company, has experienced a significant decline in market share compared to its peers in the standalone health insurance sector. 

At the end of March 2022, Star Health Insurance held approximately 55% of the standalone health insurance market, but this figure dropped to 49% by March 2023 and further declined to 45% by February 2024.

This decline represents a nearly 1,000 basis points (BPS) or 10% reduction in market share over the past two years (March 2022-February 2024).

The decrease in Star Health Insurance's market share comes at a time when the standalone health insurance industry, as a whole, has seen an increase in market share compared to general insurance players.

Over the same two-year period, the Standalone Health Insurance Industry (SAHI) gained a market share of 148 bps from the general insurance industry.

Within the standalone health insurance space, several companies have experienced gains in market share.

Niva Bupa Health Insurance saw an increase of 355 bps or 3.55%, Aditya Birla Health Insurance gained 270 bps or 2.7%, Care Health Insurance gained 260 bps or 2.6%, and Care Health gained 50 BPS or 0.5%.

Analysing the trend over the past year (March 2023-February 2024), all standalone health insurance companies except Star Health Insurance saw an increase in market share.

Star Health Insurance lost 400 bps or 4% of its market share during this period, while the standalone health insurance industry gained 73 bps.

Specifically, Niva Bupa Health gained 149 bps, Aditya Birla Health gained 74 bps, Care Health gained 161 bps, and ManipalCigna Health gained 4 bps in market share between March 2023 and February 2024.

In earlier interactions with CNBC-TV18, Star Health Insurance has maintained that the company's focus has been on growing its individual business and exiting the group business, which has led to increasing loss ratios for health insurance companies.

Analysts who track the sector agree with this strategy.

However, the question remains whether Star Health is gaining share in the retail category.

Looking at the data, Star Health Insurance has lost market share of 540 bps or 5.4% between February 2022 and February 2024.

During the same period, the Standalone Health Insurance Industry gained market share of 554 bps or 5.54%.

Additionally, Care Health Insurance gained market share by 246 bps or 2.46%, and Niva Bupa Health gained market share by 243 bps or 2.43%.

A similar trend is observed when examining the data for the last year alone.

Star Health Insurance lost market share of 350 bps or 3.5% between February 2023 and 2024, while the Standalone Health Insurance Industry gained market share of 220 bps or 2.2%.