Star Health aims to double bancassurance biz to Rs 2K cr in three years

The company currently has over 70 partners in the bancassurance business, including state-owned banks, private banks, and non-banking finance companies

India’s largest standalone health insurance company Star Health and Allied Insurance on Friday said that it was targeting to double the revenue from bancassurance (banca) from around Rs 1,000 crore to Rs 2,000 crore in the next three years.

 

“We will be closing this year at around Rs 1,000 crore in revenue from the bancassurance channel and will be looking to double this in the next three years, leveraging on the innovative products and rural-focused partnerships,” said Biju Menon, executive director and chief business officer of Star Health.

 

The company at present has over 70 partners in the bancassurance business, including state-owned banks, private banks, and non-banking financial companies (NBFC), and is expected to touch the 100 mark soon. To increase the fresh business, it reportedly plans to add around 30 bancassurance partners by the first half of the next financial year (FY26). At present, its bancassurance share of revenue is around 14-15 per cent of the fresh business and around 8 per cent of the overall business.

 

The company said that it is giving extra thrust to rural India to drive the growth in this business. “The rural sector is what we are mainly targeting, largely concentrating on Grameen and Co-operative banks, in addition to regional rural banks (RRBs). This channel is going to contribute to both retail and corporate growth for us. Partnerships with banks are looking at mutual growth,” Menon added.

 

During the third quarter itself (Q3FY25), the company reportedly partnered with players like Neogrowth, RBL Bank, Niwas Housing Finance, and Northern Arc Finance. The company has tieups with five large public sector banks (PSBs) and operates from its 38,000 branches across the country.

 

Bancassurance is an arrangement between a bank and an insurance company, allowing the latter to sell its products to the bank's client base. The growth plans by Star Health come at a time when Insurance Regulatory and Development Authority of India (Irdai) chairman Debasish Panda has urged banks to focus on their “core job”, rather than prioritising insurance sales, calling it “incidental” to banking.

 

Asked about the recent data breach at Star Health, Menon said the company is taking all necessary precautions on the information technology (IT) side to ensure that such incidents are not repeated. “We have implemented robust measures to prevent such incidents in the future. Safeguarding customer data and privacy is of prior importance to us,” he said.

 

Banca achieved 25 per cent YoY growth in fresh business and 24 per cent in the overall business growth in H1FY25, showcasing its increasing significance.

 

“Technology plays a crucial role in insurance. We are ensuring we effectively use paperless processes to give a digital experience to customers. Penetration will increase this and costs will also reduce,” he added.