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India’s first and only insurer the Star Health Insurance Company Limited is about to raise an amount of Rs. 400 crore.The investments are expected from new and existing investors including foreign investors according to the information from the chairman and managing director of the company.
The Star Health backs support from ICICI Venture, Oman Insurance, Tata Capital and Sequoia Capital also Indian business houses. The development is visible since the Rajya Sabha passed insurance bill with an increased limit of foreign direct investment from 26% to 49%.
The chairman of the Star Health Insurance Mr. Jagannathan who has served as Managing Director of India’s in the largest public sector insurance company, with 40 years of experience says, that it is essential to raise the investment limits as insurance is a capital intensive business with a longer waiting time of six to seven years for turnaround. With the help of new health insurance along with general and life insurance, there will be better penetration. The health insurance has the potential of increasing its territory from 15% to 45% by the end of 2020. He clearly states“now is the time to allow the foreign direct investment in order to improve the performance of the programs.”
In the fiscal year, 2014 Star Health grossed direct premium of Rs. 1,050 and set itself a target of Rs 1,500 crores for the current financial year. The company has touched the highest growth rate of 34% in the industry. Instead of intensely focusing on the government-sponsored insurance schemes the company is now focusing on personal accident covers, medical and oversea travel insurances. From next year onwards, the company is ready to show the balance sheet profit where the company would look at the IPO in the coming years.
Out of all the top five insurance companies Bupa Health insurance, Cigna TTK and Apollo Munich, it is Star Health which is focusing exclusively on health insurance.