Case Study

Star Health Insurance


The company

  • Region: Asia and EM
  • Sector: Financials
  • Stage: Small/mid buyout
  • Type: Co-investment
  • Highlights:
market share

Private Equity Manager (GP)

Case study

About the company

Star Health Insurance (“Star”) provides affordable medical insurance, accident insurance and travel insurance plans in India. Star is the largest private sector standalone health insurer in India, the largest in retail health insurance and the fifth largest health insurer overall. It operates with a network of c.11,000 hospitals across India. The company was a pioneer of in-house claims processing in India and employs a large team of in-house doctors to provide a seamless claims processing experience to its customers.

Investment rationale

  • Health insurance is an underpenetrated and high-growth segment in India.
  • Star has a c.55% market share amongst standalone health insurers in India and is a leader in the retail segment where it is harder to build scale compared with the corporate and government segments of the market.
  • Star is one of the few general insurance players in this emerging industry in India and has been profitable since 2016.

Investment ESG credentials

  • Star introduced a Coronavirus policy to cover Indian residents who test positive for COVID-19, offering a quick solution for people who have no health insurance cover but need protection against COVID-19.
  • A dedicated employee COVID-19 helpline was set up offering COVID-19 advice to employees and for cases of hospitalisation or death from COVID-19.
  • The company provided financial assistance for hospitalisation costs, funeral expenses, priority release of terminal benefits and hospital support.
  • The company had a Corporate Social Responsibility budget of approximately $750k in FY 2021, which was spent on several activities such as maintaining public toilets, food distribution, a dialysis centre and support for sufferers of non-communicable diseases.

Active management and value creation

  • Madison India Capital (“Madison”) was an existing investor in Star, and was part of the consortium to complete the buyout under the new lead shareholders.
  • Madison worked with the management team and other shareholders to help Star navigate the COVID-19 crisis in India.
  • Madison developed an ESG management system that integrates consideration of ESG risks into their investment processes. According to Madison’s annual ESG report, Star Health is one of the best-performing companies in their portfolio from an ESG perspective.
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