CHENNAI: The health insurance industry has witnessed an overall 50% growth in demand following the GST rationalisation in September 2025, said Star Health & Allied Insurance MD & CEO Anand Roy on Monday.
Addressing the media, Roy said, “The government has given a significant tailwind to the sector by reducing GST on health insurance from 18% to 0% last year. By rationalising GST on health insurance products, the government is treating them as a basic necessity. This is a structural change. After COVID-19, there was a surge in demand for health insurance, which later declined. However, we expect demand to remain strong.”
He added that following the removal of input tax credit (ITC) in September 2025, the company is absorbing the ITC cost. For distribution-related expenses, it has discussed adjustments with agents, and the cost is being managed within distribution margins.
Roy was speaking after the company launched 32 Arogya Seva Kendras across nine states. The ASK health clinics, implemented in partnership with Piramal Swasthya, part of the Piramal Foundation, will provide structured primary healthcare services at zero cost to patients.
India’s largest standalone health insurer expects to generate revenue of ₹20,000 crore this financial year and has already recorded over ₹17,000 crore as of January. The Chennai-based insurer currently covers 2.5 crore people and expects this number to increase by the end of the financial year. Nearly 95% of its business comes from the retail segment, while group insurance accounts for less than 2%.
Roy said, “Group business is highly competitive, and we do not see a meaningful profit pool in corporate insurance.” He added that a significant portion of the company’s business now comes from Tier 2 and Tier 3 cities rather than Tier 1 cities.