January 03, 2019

First monies from investors have come in, deal to close by March: Star Health CMD


Chennai: SafeCrop Holdings, a consortium comprising WestBridge AIF, billionaire invesor Rakesh Jhunjhunwala and Madison Capital, agreed to acquire standalone private health insurer Star Health and Allied Insurance last August. With the transaction getting into the completion mode, CMD of Star Health V Jagannathan tells Rajesh C that the company has received some money as part of the deal and the transaction will close by March as agreed. Excerpts:

At what stage is the transaction with SafeCrop?
Everything is on track. We have received Rs 350 crore. The deal itself valued Star at Rs 6,500 crore. We are on track to complete the transaction by March.

There are rumours of renegotiation?
That might be somebody’s opinion. I cannot comment on speculation. The transaction is on track on agreed terms and will be closed by March 2019.

Have there been any changes at the top?
For now, the existing team continues to run the company. I am sure there will be some changes when the transaction concludes by March. It will be the prerogative of the investors to reconstitute the board. We have built Star as a family and as an employee friendly organisation. The investors have told us that Star will continue to have its name and seal on employees. The investors have also assured us that the top management will continue to guide and grow the company.

Will you continue with Star?
You should ask my investors and not me. If given an opportunity, I will always be happy to be with Star. It is my baby.

How has been the company’s performance?
The latest official figures of November released by IRDA shows that we have written Rs 1,160 crore more in retail premium over our nearest competitor. For the year (March 2019) we expect to close at Rs 5,500 crore (for the previous fiscal the company ended at Rs 4,160 crore. My plan would be to touch at least Rs 7,000 to Rs 7,250 crore in topline by March 2020. It can be achieved.

What is your take on government insurance business?
As you would be aware we were one of the earliest entrants in the government insurance space. We managed nearly 12 crore families in Andhra Pradesh and Tamil Nadu way back in 2007. The government business is a wonderful concept. We must do it judiciously and carefully. We just won the contract with Puducherry government to manage its insurance scheme there.

Medical insurers are giving a digital push. What’s happening in Star?
We have appointed some very senior professional to chart out our digital strategy. We are working on two-pronged approach viz., operational and sales. You will see a lot of action on the digital space from us sooner than later.