Kotak sees likely regulator intervention impacting Indian health insurers

Star Health and Allied Insurance

20/12/2023 10:06

** Indian customers are facing higher claim rejections and
tariffs from health insurers, which could prompt regulatory
intervention, Kotak Institutional Equities says
    ** Says industry-wide claims rejection ratio shot up to
23%-24% during FY2021-22 from 12%-15% during FY2015-19
    ** Adds trends reported by standalone health insurers
suggest rejection remains high in FY23 and 1HFY24, as FY23
industry data is unavailable
    ** Tighter norms by India's insurance regulator on claims
rejection, especially in pre-approved hospitals/procedures can
put pressure on insurers and healthcare players - brokerage
    ** Says high medical inflation has affected profitability
across players, especially standalone cos like Star Health &
Allied Insurance  STAU.NS 
    ** Cuts medium-term growth estimates, fair value to 550
rupees from 620 rupees
    ** Shares of Star Health, down 8% YTD, close down 2.5% at
523 rupees

 (Reporting by Sethuraman NR in Bengaluru)
 ((Sethuraman.NR@thomsonreuters.com; (+91 9945291420); Reuters
Messaging: nallur.sethuraman.thomsonreuters.com@reuters.net))