Star Health and Allied Insurance Co Ltd (NSE: STARHEALTH) Q3 2026 Earnings Call dated Jan. 29, 2026
Corporate Participants:
Unidentified Speaker
Anand Roy — Managing Director & Chief Executive Officer
Nilesh Kambli — Chief Financial Officer
Analysts:
Devyanshi Dave — Analyst
Swarnabh Mukherjee — Analyst
Prayesh Jain — Analyst
Avinash Singh — Analyst
Nischint Chawathe — Analyst
Sanketh Godha — Analyst
Shobhit Sharma — Analyst
Ansuman Deb — Analyst
Dipanjan Ghosh — Analyst
Satvik — Analyst
Raghvesh Sharan — Analyst
Nidhesh Jain — Analyst
Presentation:
operator
Ladies and gentlemen, good morning and welcome to the Star Health and Allied Insurance Co. Ltd. Q3 and 9 month FY26 earnings conference call. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing Star then zero on your touchstone phone. Please note that this conference is being recorded.
I now hand the conference over to Ms. Devyanshi Davi from AD Factors PR Investor Relations team. Thank you. And over to you, Ms. Devyanshi.
Devyanshi Dave — Analyst
Good morning everyone. From the Senior management, we have with us Mr. Anand Roy, Managing Director and Chief Executive Officer, Mr. Amitabh Jain, Chief Operating Officer, Mr. Himanshu Varia, Chief Marketing Officer, Mr. Nilesh Kambli, Chief Financial Officer, Mr. Anish Srivastava, Chief Investment Officer, Mr. Aditya Biani, Chief Strategy and Investor Relations Office Officer and Mr. Shambit Bhattacharya, Head Investigations.
Before we begin the conference call, I would like to mention that some of the statements made during the course of today’s call may be forward looking in nature including those related to the future financial and operational performances, benefits and synergies of the company strategies, future opportunities and growth of the market of the company services.
Further, I would like to mention that some of the statements made in today’s call may involve risks and uncertainties. Thank you and over to you Mr. Roy.
Anand Roy — Managing Director & Chief Executive Officer
Thank you very much and a very good morning to all of you and thank you for joining Star Hills earnings call for the third quarter of FY26. I know we are late in January but I would take this opportunity to wish you and your loved ones a very happy new year. 26. So let me set the context. India’s insurance industry is moving beyond penetration catch up zone to a phase of sustained compounding reinforcing its role in the core pillar of economic infrastructure. We welcome the recent Sabka bhima sabki raksha that is the amendment of the Insurance Laws Bill 2025 and we believe it is a significant policy milestone towards further deepening of insurance penetration.
The bill institutionalizes trust through the establishment of Policyholders Education and Protection Fund strengthening the foundations for sustainable trust led development. We believe that health insurance in India is entering a structurally advantaged phase with policy tailwinds and rising consumer intent translating into sustained demand growth. Health insurance is already the largest and the fastest growing segment within the non life industry. Within this retail health is the most consequential value pool voluntarily purchased by families across the country to protect their household balance sheets from medical shocks. IRDAI’s annual report for FY2425 reinforces this momentum with the lives covered under retail health has grown at 7.7% year on year versus 5.6% year on year in FY2324.
The number of lives covered exceeded 6 crores by 03-31-2025. So on the policy front, the recent landmark GST exemption on retail health has been a structural catalyst lowering the all in insurance cost for households. This is already visible in the category growth. While overall non life Insurance grew at 11.5% in quarter three FY26, retail health insurance grew 33.6% that is three times more over the same period. Amidst this conducive backdrop, I think Star Health remains focused on on maintaining its leadership in retail health and compounding a durable value accretive franchise anchored on our four pillars which is a risk first approach, a consistent focus on ROE customer centric execution and a digital first mindset.
With this let me come to the quarterly performance highlights of our company. Before I share the updates on our quarterly performance I would just like to kindly remind you that we continue to take all our business and investment decisions based on the index accounting which is aligned with the IFRS principles. IFRS is designed to capture the value creation over the policy lifetime rather than a short term accounting outcome and we have been following the IFRS aligned reporting structure consistently so. Now coming to the headline statements for quarter three FY26 in quarter three FY26 our top line that is the GWP on N basis increased by 23% year on year to 5047 crores.
We ensured full pass on of GST benefits to our customers with very strong distribution alignment on the revised economics and absorption of the input tax credit. Impact on the Ind days pad for the third quarter increased from 87 crores for quarter three FY25 to 449 crores for quarter three FY26. We reported in days underwriting profit of 46 crores in quarter three FY26 as compared to an underwriting loss of 79 crores in quarter three FY25. This was driven by improvement in the combined ratio by almost 320 basis points from 102.1 in Quarter 3 FY25 to 98.9 in Quarter 3 FY26.
As in the previous quarters we have demonstrated loss ratio decline continuously in successive quarters with a 301 basis points decrease from 71.8 in quarter three FY25 to 68.8 in quarter three FY26. The retail loss ratios also have decreased by 103 basis points year on year to 68.4% in this quarter. Also as in the previous quarters our expense ratio declined further by 16 basis points from 30.3 in the last year to 30.1 in quarter 3 FY26. So the headline statements for 9 month FY26 I would like to mention here on YTD basis our top line the GWP increased by 16% year on year to 13,856 crores.
Our Indes pad increased 87% year on year from 516 crores during 9 month FY25 to 966 crores for 9 month FY26. We reported in days underwriting profit of 20 crores in 9 month FY26 as compared to a loss of 227 crores in 9 months 25. This was driven by significant improvement in combined ratio by 200 and 22 basis points from 102.1 in 9 month FY25 to 99.8 in our current 9 month FY26. The improvement in combined ratio was driven as a mix of both expense and loss ratio. Our loss ratios improved by 124 basis points to 70% and our expense ratio also improved by close to 100 basis points to 29.8% for the nine month period.
Our PAD growth was driven by both operating profit and investment income. We registered an Investment yield of 9.6% for 9 month FY26 Supported by a diversified profile of assets as on 31st December 2025, 18.7% of our book was in high yielding assets such as equities, ETFs, REITs and Invids. We believe our quarter three and nine month performance reflects our disciplined execution and the positive impact of the corrective actions that we have been taking both on the underwriting and the claims management side. Now coming to the business details. Operationally we continue to build a very diversified and granular retail franchise while maintaining the category leadership.
Our market share in retail health segment was 31.3% for 9 month FY26. As the market leader we view insurance penetration augmentation as both an opportunity and a responsibility. Continuing with n basis on the business metrics during the quarter our GROSS Premium increased 23% year on year by fresh business growth of 45% and the renewal premium growth of 17% on the nine month basis our GWP growth stood at 16% with fresh premium growing at 18% and renewal premium growing at 16%. We remain focused on certain preferred geographies, certain demographics and products and channels that maintain and meet our defined ROE thresholds.
Our preferred segments are growing faster at 1.3 times than the company’s average on the overall fresh business Coming to the details of our distribution channels, let me start with Agency which is the backbone of our business. With 83% business contribution coming from our agency force, our GWP in agency channel grew 19% year on year during 9 month FY26 our fresh business in agency channel grew 35% year on year in the 9 month basis. We registered an accelerated growth of almost more than 66% in quarter three of FY26 which was supported by both a very robust 16% growth in fresh policies in the number of policies growth.
So our granular market reach continues to convert consumer demand into growth with 60% fresh business emerging from semi urban and rural markets. So StarHealth is as you know very strong in the semi urban and rural markets as well and we continue to invest in the Agency channel with overall agent count exceeding 8 lakhs by 12-31-2025. Coming next to our digital distribution channel which continues to grow from strength to strength, Digital business is structurally our most profitable channel with digital D2C operating at industry leading scale in the terms of mix, 77% of our digital business emanates from our in house digital channel D2C channel while the remaining business comes from our strong digital partners.
Digital channel contributed 9% of our overall business and 20% of the fresh business for 9 month FY26. Our GWP from digital channel grew 35% year on year basis for 9 months driven by a strong fresh premium growth of more than 46%. Coming next to our bank assurance channel, Bangkard contributed 7% of our overall GWP and 5% growth on a year on year basis. We have deliberately upgraded the mix of our bank assurance products towards certain preferred products which is now making almost 94% of our fresh premium contribution in nine month FY26 which used to be 76% in last year nine months.
We continue to expand our base of banker partnerships. We have added six new banker partners during the current fiscal. Our corrective action on certain loss making accounts in this channel will fully reflect in our profitability during the coming quarters. On the Corporate distribution corporate contributed 1% of our overall GWP owing to our recalibrated channel strategy as we have articulated earlier in this space, we are focusing on the higher quality SME segment with 73% of the corporate business coming from the SME segment during this nine months compared to 44% in the previous year. Our corporate group loss ratios have significantly improved from 94.6 in 9 month FY25 to 83.5 in 9 month FY26.
This is a result of our recalibration on the group distribution which we have mentioned before as well. So coming to the overall portfolio maintenance and calibration we have implemented diligent measures towards qualitative recalibration of our portfolio and ensuring delivery of sustainable ROE outcomes on a YTD basis. Our retail to group business mix was 95 to 5 as against 91. 9 for 9 month FY25. So 95% of our business now comes from retail. Across all the channels mentioned earlier, our claims ratio for the retail book declined further towards 69.4% in nine month FY26. As a result of our targeted underwriting, pricing and associated corrective strategies being implemented since the last year.
We continue to invest towards enhancement of our vigilance and reduction of FWA which is fraud, waste and abuse as a core operational priority. Medical inflation in India continues to be at a very elevated levels. Various studies conducted by leading firms like AON and Willis Tower Watson expects medical inflation in India to be higher than 12 to 13% in 2026. Unless there is a structural cost moderation through government interventions, price increases by insurance companies would be essential to preserve sustainability. So Star Health continues to serve our customers with utmost fairness with outcomes demonstrated in the consumer behavior.
We have settled more than 2 million claims amounting to 8,900 crores during 9 month FY26. These numbers will give you an idea about the operational rigor and the efficiencies of this organization. Our claim settlement ratio consolidated at 90% for 9 month FY26. Our grievance ratios per 10,000 policies reduced from 22 in 9 month FY25 to 20 for 9 month FY26. Our renewal retention trends which is also indicator of the consumer satisfaction were robust during 9 month FY26 with 99.2% persistency value wise our claims NPS improved to 63 at December 2024. More importantly, our cashless claims in NPS improved to 72 from 63 during the same period last year.
So our cashless claims NPS probably is the industry leading right now with 72 points, our overall company level NPS improved from 55 at December 24 to 64 at December 2025. This continued lift in persistency and NPS coupled with the reduction in incidence of grievances are validated of improved customer experience and strengthens our resolves to compound this momentum with more disciplined execution and coming finally to our digital initiatives on the both service side and the sales side. As you know we have been making significant investments in technology. Probably we are the largest investor in technology in the health insurance business, so we are able to see deliver tangible progress on both productivity and service outcomes.
Digital is now embedded across the value chain through our modernization of legacy platforms, our workflow automation and enablement of multiple straight through journeys at scale Let me give you some numbers starting with the streamlining of acquisition, 94% of our new policies are now originating digitally. 76% of the premiums were collected through the digital route during the year. In quarter three. Our distribution app which is Atom, facilitated 85% of the fresh policy acquisitions indicating very high digital adoption amongst our distribution partners as well. On the claims and wellness side, our AI powered claims platform continues to scale and has now enabled migration of around 57% of our claims traffic translating to better productivity outcomes and also reduction in FWA.
We expanded our home healthcare services to more than 300 locations from around 250 at the close of last quarter. Expansion of doctors and specialties has driven 73% growth in our telemedicine numbers indicating strong adoption of our wellness initiatives by our consumers on our Customer app. We are happy to let you know that with the enhanced features and increased adoption, our customer app Downloads have crossed 13 million by December 25th and our monthly active users have also scaled more than one and a half million mark. So this is becoming more and more important in the way we are servicing our customers.
We have observed that desirable levels of self Service adoption with 60,000 plus claims have been submitted on our Customer app. There is an absolute digital experience on claim submission on the Customer app which is actually more than double of what we did in the last year. Nine months and more than 3 lakh policies are renewed through the app now. So stitching together everything as we enter into the last quarter of the current fiscal, our priorities remain very clear to deliver value driven growth, disciplined underwriting, very strong fraud analytics, deeper partnership with our hospital partners and distributors and sharper customer engagement across the life cycle touch points.
We remain steadfast in our mission to deliver responsible, resilient and customer centric health insurance I again thank you very much for your continued trust in StarHealth. And with that now we open the floor for Q and A. Before we go into Q and A I would also like to take this opportunity to introduce Sombit who has joined us as the head of investor relations and he’ll be interacting with all of you. And I would like to also take this opportunity to thank Aditya who has been your face of the company meeting all of you. He will continue to be with Star L to play a very important role on the business side of things. of us are always available to all of you for any questions you may have about the business. Thank you so much. Look forward to your questions.
Questions and Answers:
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press Star and one on the Touchstone telephone. If you wish to remove yourself from the question queue you may press star and 2. Participants, you are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Swarna Pukarjee from BNK Securities. Please go ahead.
Swarnabh Mukherjee
Hi sir. Good morning. Thank you for the opportunity and congrats on a good set of numbers. I have three questions. First of all I just wanted to understand the trajectory of earned premium growth. Because I think last year from 3Q onwards you had started increasing the price across products and by Jan you had repriced 65% of the portfolio. However, I think on an earned premium basis the growth is still you know, lower than what our you know, top line growth is. So just wanted to understand when do we see that playing out that last year’s price hike in the unpremean growth.
So that’s the first one. Second is on the fresh commission, fresh business growth and I think commendable numbers. I just wanted to understand the commissions for this fresh business. How it would be placed vis a vis renewal business. And if you know. So what I also notice is that net commissions have remained stable, you know, despite the fresh growth. But that has come up in the ifrs. So I just wanted to understand what. How should I read this? Or whether we are doing lesser proportion of long term products. Now if you could throw some light. Thirdly in terms of agency I think sir, you have mentioned that fresh NOP group. Hello. Am I audible?
Anand Roy
Yeah, yeah. Please go ahead.
Swarnabh Mukherjee
Oh okay. Yeah. So in terms of agency I think you have reported 6% fresh NOP group while premium growth is 35%. So is this Led by, you know, higher ticket size products. What is happening? If you can draw some light on this. Yes, this is my question.
Anand Roy
Yeah, thanks a lot. Thanks a lot for this question and thanks for your good wishes. So see, the NEP growth is a factor of multiple things. One is, you know, on the group side, as you know, we have recalibrated our business strategy and that is also reflecting on the NFE growth on the retail side of things while we are, we are, you know, on a Conservative1 by360 and as a result of which the NEP growth flows into the books over a period of time. But if you look at the, you know, the way the growth is coming in terms of top line and also renewal retention, NEP growth will improve in the coming quarters and I am sure that will be demonstrated on the commission side.
On fresh, we are paying, you know, commissions. Our long term business has increased and this is, we have spoken in the past, customers are preferring long term plans and which we are quite happy to offer for the simple reason I believe it is a win win for all stakeholders. So commissions are paid to agents and distributors on long term plans depending on certain business outcomes that they have to deliver. So as you have rightly mentioned, despite growth in business, significant growth in business, our net commissions have remained stable. And under the IFRS accounting, the deferred acquisition cost is one of the main contributors which helps us to achieve this.
And finally, on the 6% NOP growth, I think we have been focusing on profitable growth. The growth with profit has been our agenda. Certain markets we have taken some calibration. But this is on a YTD basis. If you look at our growth for quarter three, it is significantly, you know, higher. So I think we will be. We are delivering more than 16% growth in volume in quarter three. So things are improving on the NOP as well.
Swarnabh Mukherjee
Okay, sir, got it. Very useful. Just one last follow up. So in the presentation, the sum assured number which you have provided average some assured. Last quarter it was around 17 lakh. That has come down to around 12 lakhs for nine months. This is because we are now excluding a group from the calculation that put my understanding correct.
Anand Roy
Yes, the group is excluded. Correct.
Swarnabh Mukherjee
Okay. Okay, Understood. Yeah. Okay. Thank you so much, sir. And all the best.
operator
Thank you. We have the next question from the line of praise. Jain from Motilal OSWAL Financial Services Ltd. Please go ahead.
Prayesh Jain
Yeah.Hi, good morning everyone. Congrats on a great set of numbers. Firstly on the loss ratio, how much of the improvement would you attribute to the Fact that we have a very strong fresh growth and probably, you know, that kind of comes in the impact or probably, you know, the loss ratio on that kind of increases going ahead. But what I’m basically trying to figure out is how is the loss ratio panning out in the renewal book? Whether what’s the trajectory there? Because the fresh contribution has gone up and that would have played its part in reducing the loss ratio. So is the loss ratio kind of coming down also on the renewal book is my question.
Unidentified Speaker
Yeah, hi Brish. Yes, the impact of price changes last year is clearly showing and we are seeing a reduction the loss ratio of our renewal book as well. Of course, increasing of fresh will also have a role in terms of bringing down the lost ratio. But that will play out over a period of time because the fresh growth has gone up significantly in this quarter. So on the. On premiums it will show up in some.
Prayesh Jain
Yeah, could you give some numbers on your, you know, say a three year, three year book loss ratio or what would be the three year loss ratio compared to say a year back and today?
Anand Roy
I think these things we can have it offline. You can come and meet us.
Prayesh Jain
Okay. Okay, got that. Second question was, you know, attention to what earlier on the commission bit, you know, there’s a staff improvement on the commission commission ratios, given that, you know, they were, you know, fresh growth was so strong, what really kind of played played into it to bring down the commission ratios to that quantum.
Anand Roy
So fresh, when you talk about commission ratio, what you’re looking at I gap numbers the gross Commission to GW. Okay.
Prayesh Jain
Yeah.
Anand Roy
So if we see quarter two, it is 17.1% for quarter three also it is 17%. So it is consistent, you know, the reductions that we had done on the senior citizen that is playing out which is getting offset with the long term business that we are writing and long term business, a large part of it still is on one by n basis. So you know, it doesn’t impact the commission ratios.
Prayesh Jain
Okay. Okay. And the last question is on again, you know the regulations where now there’s so much discussion on commissions bit that commissions have to be brought down in the system. And the other part is the health, the healthcare system. Right. What are the development on both the. Both the fronts with respect to negotiations with hospitals or any. Anything that you can share on. What are the developments both on the commission front as well as what are the regulators talking about? Commission friends as well as the healthcare regulator front?
Anand Roy
Yes. So see Prijesh, that’s a good question. On both on the Commission front and on the expenses of management. I think there is, we expect that the regulator may be reviewing this. This is what we have been also hearing. We await for some final clarity on that. But at a macro level, I think in the larger interest of the consumers, expenses of management have to be adhered to and we believe that it has to be, you know, implemented very, very strictly. This is something that is definitely desirable for the industry, you know, performance on a sustainable basis.
So if any reduction in expense of management is articulated by the regulator, obviously we will be prepared for it. As far as the hospital negotiations are concerned, this is an ongoing process. We are seeing good, good interaction with hospitals, hospitals with multiple partners like AHPI and all of that. We are talking to all of them, we are meeting them and we are also able to see some acceptance of, you know, from their side to find a solution which is win, win for all of them. And there is a lot of work going on at the GI Council level, as you know, in terms of common impanelement of hospitals and so on. So I think in the next few months and years we should see some good movement in this area.
Prayesh Jain
Got that. Thank you so much and wish you all the best.
Anand Roy
Thank you.
operator
Thank you. We have the next question from the line of Avina Singh from MK Global. Please go ahead.
Avinash Singh
Yeah, hi, good morning, thanks for the opportunity. Good set of numbers. Anand question I will stick to one. Particularly on the claims ratio side. Certainly there is an improvement if you see sequentially on a YY basis. But if we look at more on the nine month basis and the retail claims ratio because a significant portion of improvement has come from group now on the retail side, I mean versus 69.6 of last nine months to this nine months 69.4. The improvement is there but it’s kind of minimal and it is on the back of also the price hike have been taken, a lot of remedial exchange taken.
So the question is that okay, if I mean we were to look say over maybe two, three years kind of a thing where maybe a desirable number for you on the claim side would be even lower from here. So how do you see this panning out? I mean given that, I mean, you know, the apparently medical inflation has started to bit of a cool down in recent quarters. You have taken a price hike and remedial action yet the retail and you also have a very, very impressive fresh growth and overall growth yet you know, the clear improvement over these nine months yui basis on retail side is still up 20 basis point. So how do you see this journey over next, you know, two, three years? And where would you see or desire to settle these claims ratio piece? Thanks.
Anand Roy
Yeah, thanks, Avinash. So see, I think on the retail claim ratio, you have to, I mean, obviously you understand equally well the price divisions that we have taken and all the underwriting changes that we have made. These things to flow into the loss ratio and the earned premium takes, you know, 18 to 20, 24 months. So we are still not even 12 months done. I think more importantly, you have to look at the quarter three claim ratio of retail and if you see the Trends of the quarter three, there is a 103 basis point improvement over last year.
So on the trend side, we are seeing encouraging signs. But on the yoy, yes, the decrease may not be that sharp, but we believe that this will trend downwards going forward. Now, as I told, we are not targeting any specific loss ratio as such. We are hoping to deliver a mid teens ROE business and that is what we are focusing on. And this will be a blend of both loss ratio and combined ratio so that, you know, we are able to meet those objectives.
Avinash Singh
Got it. Thank you.
operator
Thank you. We have the next question from the line of Nishjan Chavate from Kotak. Please go ahead.
Nischint Chawathe
Hi. Thanks for taking my question. You know, this is essentially on the acquisition ratio. You know, this ratio has gone up to around 26.9, you know, versus 23 in the second quarter or probably even 23 in the third quarter last year. So how should one think about this?
Anand Roy
So Nishin, on the IFRS side, you know, the fresh growth that we had in the current quarter had some impact in terms of the DAG ratio. So it will keep on normalizing, you know, as the growth normalizes.
Nischint Chawathe
So at a cohort level, has the. Acquisition expense ratio gone up?
Anand Roy
No, not really, but yes. I mean, the fresh cohort for this quarter will have a higher acquisition cost, you know, which will pan out over a period of time.
Nischint Chawathe
So fresh commissions would be higher.
Anand Roy
Correct, correct.
Nischint Chawathe
Okay, sure. And in terms of GST impact.
Anand Roy
So. As we have mentioned, you know, we have passed on the GST to our intermediaries. There is no impact of GST on in this. All the commissions that we have paid are inclusive of gst.
Nischint Chawathe
Got it, Got it. Thank you very much.
operator
Thank you. We have the next question from the line of Sanket Goda from Evander Spark. Please go ahead.
Sanketh Godha
Thank you for the opportunity. My first question is again on the loss ratio for the third quarter. See, we have a reserve release of 142 crores and that played a significant role for delta improvement in the loss ratio. If I ignore the reserve release then your loss ratios probably are very similar to what you reported in second quarter. So just wanted to understand this release how sustainable it is and from which product you have seen this release and because that numbers clearly benefited on the loss ratio is my read. And the second question is that even if the improvement has happened in loss ratio any.
Any role was played by the GST cut with respect to consumer bulls on the bills which. Which I believe is around 2025 percentage of every bill on an average their gst cut off around 7% change. Had any additional benefit on. On. On the overall loss ratio what you reported in the third quarter. That’s. That’s my first question on loss ratio.
Anand Roy
Yeah. So you know the outstanding claims is the functions of the claims repaired during the period because you know 85% of the claims are cashless while the customer is discharged. The hospital payment happens with the lag of one month. So whatever we have paid in the current quarter is the claim outstanding as on the 30th of September, you know, so whenever the claim ratio goes down, it’s automatically the outstanding claims also goes down because the claim outstanding or the claims reported during the quarter are lower and hence the outstanding claim is lower and the paid is for the last period.
So there is no impact of the reserve release or the outstanding claims reduction on the loss ratio. In fact we have been strengthening our IVNR quarter on quarter. You know, to take care of any volatility on the GST side.
Unidentified Speaker
On the GST side we have seen you know, some impact of that coming on the bills. But see the overall ratio of that vis a vis our overall spends on claims is a very insignificant amount. I mean it will have some role in offsetting some of our other GST output in the areas where services, GST etc we’ll have some extra cost. But to that extent the loss ratio improvements are more structural in nature in terms of our pricing improvements, our continuous work on improving. Improving our loss cost in. In terms of managing our book better.
Sanketh Godha
Understood. No, maybe that the part might be getting reflected in the optic side. So only on commission side was sorry, only on the claims. Whether. Whether you had 2030 basis, 40 odd basis point positive above because of the GST benefit.
Unidentified Speaker
No, no, not because of gst.
Sanketh Godha
Understood, Understood. And other two questions are basically given your growth has been very strong in the new business, I just wanted to understand the color of the mix in the new business. How much it’s long term compared to previous quarter or even maybe 3Q to 3Q and 9 months to 9 months. How much Delta has been driven by increase in the contribution of long term plans? That’s one thing I wanted to understand. And second thing is on investment book side in the IFRS 413crores of fair value change what you have reported, it is largely related to equity or it includes fair value change meaningfully coming from bonds too.
Anand Roy
So let me answer the long term proportion answer first. So we are definitely seeing an uptick in our long term policies. Such policies are beneficial for both consumers and the company because the consumers are protected against the price hike for the tenure that they have opted for. And there is continuity which is intact and the health is secured. Additionally, we are able to lock in the customer early especially at R1, R2 stage where generally the retention rates are better. Further, long term policies also improve our capital efficiency as the customers pay up front. So from a business standpoint our approach is very clear.
We go for businesses which meets our ROE thresholds. Now coming to specific numbers of long term policies. On the fresh side it has contributed to about 23% versus 14% in terms of NOP. And in terms of GWP it is at 51% versus 34% on nine month basis.
Sanketh Godha
Sorry, can we repeat on GWP basis. Sorry.
Anand Roy
On GWP basis it is 51% versus 34% of nine months last year.
Sanketh Godha
Understood? Understood. And on that investment book side on. On IFRS 413 crores of your value chains.
Unidentified Speaker
Yeah. Our fixed income book is held to maturity in IFRS. Any change, any mark to market change in equities, REITs in WITs and AIF flows through profit and loss. But this is how the accounting of IFR is done.
Sanketh Godha
Okay, so. So. So in simple words what you’re trying to say that enter 413 crores is only related to equity market. Nothing to do with the bond .
Unidentified Speaker
And equities, AIFs and REITs and widths.
Sanketh Godha
Understood. Well, the proxy equities I need to say. Okay. Understood. Understood. Thanks. Thanks. That’s it. From my side.
Unidentified Speaker
Thank you.
operator
Thank you. We have the next question from the line of Shobhit Sharma from HDFC Securities Ltd. Please go ahead.
Shobhit Sharma
Yeah. Hi sir. Thanks for the opportunity. My first question is on the GWP side. So if you can give some color around the RA acceptance which we have done during the quarter is this. Does this relate to group business? And if it pertains to group business what kind of. What is the nature of that business Is this employer employee or non employer employee now second coming to the commission ratio it has improved drastically. If you look at so what what is driving that? Is this because of the first installment of the long term premium which we have received this year or is this something else? Because we have not written any kind of group business also major group business during the quarter.
So just want to understand that on the expenses side it seems to have elevated a lot during the quarter. So can you, can you give some light on that? Because there is some impact of the labor code also there and there seems to be some ESOP cost which has been accounted for. So if you can help us understand that. And lastly on your slide number 13 you have mentioned number of claims which has been paid during the first nine months. If I compare that with the full FY25 number of claims that seems to be significantly lower. Almost 50% of what you had paid in FY25. So can you help us understand that as well? Yeah, these are, these are my questions. Thank you.
Anand Roy
So on the reinsurance inward side you know for the quarter the number reported is 22 lakhs. So we had some treaty done in the last year. There is a, you know some adjustment because this treaty will get over on the 31st of July. There is no new treaty that is written and it’s hardly 22 lakh number that is got reported in the current quarter. In terms of labor code the impact for the quarter one time impact for the quarter is 16.5 crores which is reported in OPEC and that’s again you know which is a 0.4 impact on the expense ratio for the quarter in terms of number of claims reported in the investor PPT for nine months.
Nine months. There is a typo. I think it’s only the IPD claims. So including OPD will just revise it. You know it is higher for nine months period. While the last numbers are including OPD and PhD.
Shobhit Sharma
And what’s the ESOP cash which has been accounted during the quarter? Sir.
Anand Roy
ESOP cost is gets accounted under ifrs. I get there is no impact of ESOP cost on igaap. It’s always reporting only if you have issued the ESOP less than the market value. There is an impact with IGAAP numbers. We have not been doing that in the past. I think it’s hardly again 5 to 10 lakh rupees when there was a timing difference. That impact is coming but nothing substantial.
Shobhit Sharma
On the claims ratio like it has improved now on the retail side as well, so what kind of loss ratio if you look at on a sustainable basis would you be looking at? Would it be the mid-60s kind of a range or would it stay at the current levels only? I’m talking from the next two, three years point of view. Not on a short term basis.
Anand Roy
No. So see this is what we don’t want to give any number and be guided for that. We are looking at running this business at a little, you know, combined ratio which is viable and mid teens roe, that is our target that we are focusing on to achieve that. Claim ratio and expense ratio both will play a role. So I don’t want to give any number on that.
Shobhit Sharma
Okay, thank you and all the best.
Unidentified Speaker
Thank you.
operator
Thank you. We have the next question from the line of Dipanjan Ghosh from City Group. Please go ahead.
Dipanjan Ghosh
Hi, good morning sir. Few questions from my side. First, you know, in terms of obviously you took the last round of price hikes somewhere from October 24th to maybe March 25th. Now we are almost 12 months down the road. So in terms of your incremental price hike strategy on the back book and what can we expect out there? Maybe blended price hikes or claimant versus non claimant portion or portion of the book that will, you know, see a price hike. The second question is a data keeping question. In terms of your new business mix within the net earned premium, how would that look like from 3Q to 3Q or 9M to 9M? And third question is, you know, we are already 12 months out in terms of repricing of FHO based on claimant and non claimant. So just you know, early indicators on persistency and claims ratio of the book.
Unidentified Speaker
So on pricing, you know, we took up the last year in Q4 and we will be following the annual price cycle as it is. As far as the cohort based pricing approach that we took for fho, that has given us very good results. We are clearly seeing a good lift in terms of, you know, the non payments and the risk that healthy take, you know, giving us better retentions. So that’s clearly playing out. And you know we will follow this approach going forward as well.
Anand Roy
In terms of, in terms of new business earned premium, you know, the growth in business does not get reflected in the earned premium immediately. So if we see it will gradually keep on growing, the proportion is in the range of around 20% fresh NEP and 80% renewal NEP. And that ratio has been in a similar range, you know, because whenever we take a price increase in renewal business, you know, that Also leads to to higher earned premium on renewal business. You know, as long as it’s a healthy mix and the loss issues are coming down, we are happy to manage that.
Dipanjan Ghosh
Got it. And sorry, just one follow up. I mean could you quantify the price hikes anticipated in this calendar year?
Anand Roy
Deepanjan, the guidance is that 10% senior citizen is a number that has been guided by the regulator. So you can assume that that will be the number for almost all the products in that range. Maybe slightly higher or lower depending on the product portfolio.
Dipanjan Ghosh
Got it. Thank you. And all the best.
Anand Roy
Thank you.
operator
Thank you. We have the next question from the line of Anshuman Dev from ICICI Securities. Please go ahead.
Ansuman Deb
Yeah, hi. Thanks for the opportunity. My question is on the mix of long term as well as the mix of high yielding assets. On the um. Long term is now as you said around 23% and high yielding is around 19%. From a balancing act there, there would be certain limit to these two numbers because otherwise at some point we might have some other related issues. So I was just wondering is there any limit which. We are working on these two fronts.
Unidentified Speaker
High yielding assets as of now we consider equity REITs invest in as high yielding assets for equities. Currently we have kept this cap of 15% and obviously it would be a function of opportunities. So that is one from as far as REITs and InvITs are concerned there is a regulatory cap of 3%. We are currently operating close to 3% and that book has favored approximately 21% at this point of time. On AIFs we have started investing. Drawdowns are small but we do have intent to scale up the book slowly. So region it’s capped at say 3%.
AIFs we have started just the activities. Equities capped at 15%. This is where we stand today and broadly in only in exceptional situations we would take any aggressive step on equities From here on .
Ansuman Deb
And on the ifrs, you know some MTM losses on equity can happen in Q4. It will continue as it is but on a steady state basis. We would ideally non equity mix should yield around 6.5% whereas the rest will be a function of equity. Is the right understanding?
Unidentified Speaker
Not exactly. Non equity has two components. One is a core fixed income and another one is the liquidity that we maintain for day to day operations. As far as core fixed income is concerned, we are currently operating at 7.71.
Ansuman Deb
Okay, okay. So, so, so any rate which you can tell us in terms of like the non equity portfolio.
Unidentified Speaker
I mean see linearly we would not like to give any comment on this because it’s a function of opportunity. Say for example if as you are seeing today in market that there is a lot in the G6 long, long end of the bond curve or long end of the yield curve of G Sec is extremely attractive. So maybe that I will. If I. If I build up my book there you would find that there would be some pressure and then maybe that yield should marginally decline from 7.71. But at the. But that would give me an opportunity tomorrow when credit spreads expand at that time I would ramp up my credit book. So it’s a function of opportunity. It would not be very linear. But as and when opportunities are there we try to tap those segments so that 7.71 is sustained. Now it’s also a function of maturing book. You know maturing book may have a higher yielding assets. So if we are in position to replace those assets with equally or a higher yielding assets then it would sustain broadly. Our endeavor is to maintain it to 7.71 or take it higher. But there may be time gaps and mismatches here and there.
Ansuman Deb
7.7 you are saying you will try to maintain that on the non equity or maybe it will go up also.
Unidentified Speaker
Depending upon the opportunities. Yes, absolutely.
Ansuman Deb
Okay.
Unidentified Speaker
Yeah.
Ansuman Deb
Okay. Okay. Long term mix any limits.
Anand Roy
On the long term business? You know we don’t work on any limits. As mentioned earlier. We look at all our businesses on. You know the decisions are made on IFRS basis and we go behind businesses which make ROE meters, roe threshold and we believe that long term business is delivering mid teen roe’s.
Ansuman Deb
Okay, thank you, that will be all.
operator
Thank you. We have the next question from the line of Satvik from Jeffreys. Please go ahead.
Satvik
Thank you for the opportunity and congrats on a good set of results. Just a couple of bookkeeping questions from my end. Firstly on the share of long term policy mix in CREQ and what was it in two Q and what was it last year if you could help it. And the second one on how much of advanced premiums are we carrying now versus 1H and last year That’ll be.
Anand Roy
So can we, can we take this separately with you?
Satvik
Sure.
operator
Thank you. We have the next question from the line of Raghvesh from GM Financial. Please go ahead.
Raghvesh Sharan
Hi, good morning sir. Congrats on a good quarter. Just wanted to understand the 1:40 odd growth which was released from the outstanding claims. So how do we look at this number going forward in terms of is it that we have paid a lot of the things which are outstanding from earlier or is it a function of the tax for the company itself reducing and going forward, should the numbers or total IBNR number as a percentage of the net earned premiums be lower than the 8, 9% where we have traditionally operated?
Anand Roy
Yeah, see outstanding claims is a function of seasonality. You know, Q2, when the claims ratio is higher, you know, the claims get reported and they stay in the books till the time it is paid, 30 September, there is an outstanding which gets paid in October. So as the loss issue reduces, there is an impact on the outstanding. But it’s also a function of the business volume. You know, as we keep on growing the business and the number of claims earned premium grows, the number of claims grows, it will keep on increasing. So there is no value to it.
You know, it’s a function of quarterly claims reporting that happens and the payment of claims that happen in a period. But we believe it should be in that range of 8.5 to 9.5 10%. You know, it should operate in an. In that range on a. So we tried it on a trailing twelve month basis also, you know, which is the right matrix.
Raghvesh Sharan
Okay, sir, thanks. And just one thing. Have you seen a meaningful reduction in the TAT which should reduce this number sustainably?
Anand Roy
See, there are two things. One is the cashless claim continues to be 85% of our book. The customer gets discharged from the hospital. The claim payment to the hospital happens within the, you know, defined time limits on the contracts in the hospital. It can be 15 days, it can be 30 days also. So that happens subsequently the customer is discharged. So the TAT and clean payment is independent because of the cashless and the payment to the hospital.
Raghvesh Sharan
Okay, got it. Thanks a lot.
operator
Thank you. We have the next question from the line of Nadesh from Investec. Please go ahead.
Nidhesh Jain
Thanks for the opportunity. So first question, if you can share the breakup of investment book in terms of government securities, central government securities, state government securities, corporate bonds and equity, that would be useful.
Unidentified Speaker
So it’s like this, that as on 30 December, central government securities would be approximately 22% of the book. Central government and state government put together would be approximately. So basically IOD defines it that minimum central government has to be 20%. So we are keeping minimum 22%. And so as of now 22 point marginally higher. 22 point something on central government and state government put together. IITA says that should be 30%. It would be somewhere around 33% rest is all corporate bonds and equity as you know that is around 14.9% and REITs in which another 4.7%.
So total sorry 3.8%. So total is 18.5%. This is how the breakup of book is.
Nidhesh Jain
And what are the plans to take up the equity share higher? Is there a plan to further increase the share of equity and REITS invits in the book.
Unidentified Speaker
Reads and in which cannot be because regulation says that we can be up to 33. Sorry up to 3%. So we are there regulator has talked about increasing this up to 6% but we are waiting for the regulator for the final regulations on this. So reits and Winwich as of now at the upper cap as far as equity is concerned we have some internal models where we do risk appetite testing and based on which we ultimately take a call that how much of equity exposures that we would take. So there would be a possibility that yes, we can increase equities by some quantum.
It’s a function of the solvency of the company and the capital requirement of business so broadly. These are the factors which determine that how much of risky assets that we can take in the book. This is where we stand as of now currently capped at 15%.
Nidhesh Jain
Sure, sure. Secondly, on the long term policy, is the share of long term policy at. 51% of GWP today in Q3 or.
Unidentified Speaker
Yes, or fresh?
Nidhesh Jain
Yes, in the IFRS accounting because the different costs are getting deferred. But let’s say I’m assuming that most of these will be three year long term policies. So the loss ratios will keep on increasing. So in ifrs does it give a true picture of the profitability of long term policies? Or it overstates the profitability in the first year and then second, third year we will see slightly lower profitability on these policies because loss ratios may increase in year two year three.
Anand Roy
See there are two things. One is the deferment happens over the policy period. But the operating cost is very high in the first year itself which is in the P and L in the first year. So on a combined ratio basis it is still in a similar range. Why the commission ratio and loss issues like commission issues remain stable. Loss issue increases. There is no OPEX in the second and third year. You know which is there only in the first year.
Nidhesh Jain
Sure. And the last question is on ifrs. Thanks for the detailed disclosure on ifrs. India’s financial. So sir, two, three. Question one is that how should we look at the investment income? Should we remove the. Let’s say mark to market gains and then look at the profitability or we should look at the reported profitability that is number one. Second is what is the difference between insurance service insurance revenue and nep? I thought that insurance revenue and NEP would be similar in in case of ifrs.
Anand Roy
See I’ll answer the second question first. Insurance revenue is typically the gross and premium. You know the NEP is net of reinsurance in ifrs. If you see net results of reinsurance is a single line, you know, so okay and the claims reported in gross claims, you know the ra, the acquisition cost is the commission paid deferred over a period of time. The RI cd, the RI claims, the claims, the RI recovery on claims and the RI commission is as a single line item as net results of reinsurance. Basically. So that’s the difference between earned premium and insurance revenue on the investment income.
What I would suggest is while there be volatility, you know we have been talking about to take zero is not the correct thing. You know we have 3,000 crores of equity portfolio. One can take an average return of 10% and calculate, you know, a stable revenue or the profits over a period of time. That’s how one can look at it, which is also quite strong.
Unidentified Speaker
So Nilesh, see we have to understand this, that equity markets would remain volatile. But what we have realized is over a longer period of time equity returns are largely related very closely correlated to nominal GDP growth. So on an average we can assume that 10 to 11% kind of nominal growth would be there and hence that would get translated into equity returns as well. But yeah, quarter over quarter there would be a volatility. That’s the problem of ifrs. You know that P and L accounts would become volatile. But that does not mean that we should stay away from high yielding assets especially when we are long term investors in the market.
So that is what our approach is that we look at this asset class as and from 7% moving to say 11% kind of asset class and that perfect sense for long term investors. So this is what we are trying to do and we are reasonably hopeful that over a longer period of time this 15% or 19% of the book would deliver reasonably good good returns much higher than what the fixed income book would deliver.
Nidhesh Jain
Sure sir, very useful. Thank you sir.
operator
Thank you very much. Ladies and gentlemen, due to time constraint that was the last question for today. I now hand the conference over to Mr. Nilesh Kamley for the closing comments.
Nilesh Kambli
So we have experienced a strong quarter in terms of top line growth and an improvement in our operating results, both reduction of losses and expense ratio. We are focused on execution to maintain consistency over performance. So thank you everyone for joining the call.
operator
Thank you very much on behalf of Star Health and Allied Insurance Co. Ltd. That concludes this conference. Thank you for joining us. And you may now disconnect your lines.