Star Health and Allied Insurance Company (STARHEALTH) Q4 15/16 earnings summary

Executive summary

• FY16 gross premium reached Rs.200,734 lakh; net profit was Rs.13,658 lakh after a prior-year loss of Rs.14,005 lakh.

• Management attributed the turnaround to market-business growth, claims control and expense rationalization; the outlook was described as positive.

Financial highlights

• Gross premium rose to Rs.200,734 lakh from Rs.146,919 lakh; net premium was Rs.153,975 lakh and net earned premium Rs.151,387 lakh.

• Underwriting profit was Rs.24,853 lakh versus a loss of Rs.14,737 lakh; profit before tax was Rs.13,658 lakh versus a loss of Rs.14,005 lakh.

• Net profit was Rs.13,658 lakh; basic and diluted EPS were Rs.0.00369 versus losses of Rs.4.13 per share in FY15.

• Net incurred claims were Rs.81,455 lakh; net commission was Rs.6,106 lakh and operating expenses Rs.45,395 lakh.

Outlook and guidance

• Management cited a positive outlook, linking it to emphasis on market business, control of incurred claims and expense rationalization.

• IRDAI extended the deadline to comply with insurer solvency regulations through 31 Aug 2016; solvency requirements were being followed under Insurance Act Section 64VA(1) at year-end.