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Star Health to expand equity capital

Special Correspondent

Writes gross premium of Rs. 510 crore in 2008-09

CHENNAI: Star Health and Allied Insurance Company, the country’s first standalone health insurer, is planning to expand its equity capital substantially by the end of the current financial year.

Indicating this at a press conference here on Wednesday, V. Jagannathan, Chairman-cum-Managing Director, said the promoters would bring in an additional Rs. 180 crore to the equity capital of the company. This would be done in two stages. The first stage would see an induction Rs. 100 crore by December. The remaining Rs. 80 crore would be brought in by March next year, he added. Mr. Jagannathan said all the promoters would contribute to the additional equity in proportion to their holdings in the company. At present, the share capital of the company stands at Rs. 138 crore.

The move to infuse fresh equity comes in the wake of a significant rise in gross premium written by the company in 2008-09.

Star Health wrote a gross premium of Rs. 510 crore during 2008-09, up from Rs. 168 crore in the preceding year. In the process, it reported a gross profit, for the second year in the running, of Rs. 5.27 crore for 2008-09. Mr. Jagannathan said the company had written a gross premium of Rs. 440 crore up to September this year. He was confident that Star Health would end the current financial year with a gross written premium of around Rs. 1,000 crore.

Mr. Jagannathan said 80 per cent of the company’s business came from the Government segment. He expected the contribution of the market segment to improve to 40 per cent next year from the current 20 per cent.

He claimed that Star Health had done well to garner a market share of 8.5 per cent of the Indian health insurance pie within three years of its operations. The company, he said, provided cover to 6.5 crore BPL (below poverty line) families in Andhra Pradesh and five-crore poor and marginally poor people in Tamil Nadu.

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