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Health insurance penetration can't be more than 5-6%: Star Health & Allied Insurance

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Health insurance penetration can't be more than 5-6%: Star Health & Allied Insurance

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Venkatasamy Jagannathan, Chairman and CEO of Star Health and Allied Insurance Company, said the very idea of starting the company was to cut into the middle-income group because India has a large chunk of this population, he said.

Star Health's Rs 7,250 crore initial public offering (IPO) opens for subscription on November 30. Venkatasamy Jagannathan, Chairman and CEO of Star Health and Allied Insurance Company, discussed the issue details and the outlook.
“Total penetration in the health insurance space cannot be more than 5-6 percent,” he said.
He believes that insurance is an eye-to-eye contact and the business is slowly catching up.
“A few years back, our average policy was Rs 3 lakh, today the highest range of policy is Rs 1 crore and our average policy must be around Rs 10 to 12 lakhs. So, the concept is slowly getting into everybody's mind that they should be insured and the results can be seen maybe in two to three years,” he explained.
The very idea of starting the company was to cut into the middle-income group because India has got a large chunk of this population, he said.
“We have around 777 branches, 562 offices, 10,000 employees, around five lakh agents, and wherever you see, we have representatives working there. That is the growth, which we have achieved,” he said.
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“We have branches from Jammu to Kanyakumari,” he added.
In terms of business, he explained, “There are two segments - one is group, one is retail. In group, except SME sector, the high corporate groups are loss- making. So, we avoid big corporate groups unless they are also giving us a good return. Most of our concentration is the SME sector and small business and our percentage of participation in that is around 13 percent whereas in market we are doing around 27 percent growth on such a large base.”
For the full interview, watch the accompanying video.
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