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Star Health and Allied Insurance Company Ltd
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Ladies and gentlemen, good day, and welcome to the Star Health and Allied Insurance Company Limited's Q4 and FY '23 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded.
I now hand the conference over to Mr. Pratik Patil from Adfactors PR, Investor Relations team. Thank you, and over to you, Mr. Pratik Patil.
Thank you, Darwin. Good evening, everyone. From the senior management, we have with us Dr. S. Prakash, Managing Director; Mr. Anand Roy, Managing Director; Mr. Nilesh Kambli, Chief Financial Officer; and Mr. Aneesh Srivastava, Chief Investment Officer.
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 operating performances, benefits and synergies of the company's strategies, future opportunities and growth of the market of the company's services. Further, I would like to mention that some of the statements made in today's conference call may involve risk and uncertainties.
Thank you, and over to you, Mr. Roy.
Thank you, and good evening to all of you. This is Anand Roy here. Thank you for joining the earnings conference call of Star Health and Allied Insurance Company for Q4 '23, and also for the full 12 months of financial year '23.
I would like to first highlight that we have achieved an underwriting profit of INR 204 crores with a combined ratio of 95.3% and an overall PAT of INR 619 crores, which is the highest in our history. We have achieved an EBITDA of INR 1,027 crores. For Q4 FY '23, we have achieved a combined ratio of 91.3%.
We have also made a very strong start to the new financial year. In FY '24 as we speak up to the date, our premium growth on -- for the month is more than 27%, and we expect to close this month with around 25% growth. And our loss ratios for the month is also on the -- better than the previous year.
This being the first full year post COVID and post listing, we are happy to announce that we have been able to achieve our full year guidance that we have given you. This also gives an assurance of the robust retail health insurance business model that the company has built over the last 17 years.
I will now give you a brief overview of the industry trends and the developments that we have witnessed in the last few months as well as walk you through the company's performance in terms of premium and distribution. My colleague, Dr. Prakash will cover the financial performance and aspects related to claims, including the steps that are underway to manage them.
In Q4 '23, the health insurance industry, including PA has grown by 25.4%, driven largely by 28% growth in group health and 16% growth in retail health.
Now we will talk about the growth in market share of Star Health. For 12 months FY '23, our retail health has grown by close to 18% versus the industry's retail health growth of 15.3%. That is we have been able to grow at 1.17x the industry's growth rate despite a very large base.
In Q4 '23, our retail health segment grew by 15.2% versus the industry retail health growth of 16%. In Q4 of FY '23, Star Health registered 35% market share in retail health, which is [Indiscernible] the second largest player in the industry. For FY '23, our retail market share is 34%, against 33% of the last financial year.
We continue to aspire to grow higher than the market growth rate and increase our retail health market share every year. As far as our accretion share is concerned, Star Health has registered close to 40% retail health accretion market share in FY '23.
Agency business continues to contribute around 82% of the overall business. Our agency strength has increased to 625,860 agents with a net addition of 16,165 agents in the Q4 of FY '23. For the full year FY '23, we have added approximately 76,000 new agents over the previous year. For the full year FY '23, our partnerships with corporate agents, banks and other tie-ups continues to grow aggressively and is very strong. And this premium contributed from these channels has grown by 43% during the year.
Some of the highlights in Q4 for us were as follows: as compared to -- as regards premium and distribution, we continue to focus on the digital initiatives. The digital sourcing from our web sales and telesales models have grown by 28% in FY '23 to INR 625 crores for the -- over the previous year. Our app downloads have reached 2 million downloads. Organic traffic to the website has grown by 95% in Q4 '23 over the same period last year and 39% growth sequentially over Q3 of FY '23.
We have tied up with some leading banks named Standard Chartered Bank, India Postbank and [Indiscernible] for distribution of Star Health's products through their platforms. This will further expand our reach and also strengthen the sales of our higher commercial products.
With the new EOM guidelines, this provides an immense opportunity for growth and we are sure to capture on this. The average sum assured of new policies has increased by 13% on a year-on-year basis to INR 9 lakh per policy. 5 lakhs, some insured and above now constitute 70% of the health insurance portfolio, which was 64% in the last financial year.
The premium from benefit products has grown by 53% in FY '23 over FY '22. The share of such products within the overall GWP has increased by 61 bps to 2.3% in FY '23 from 1.7% in FY '22.
We have launched 2 new products in quarter 4, which is Star Special Care Gold and Star Group Health Benefit Plus. Special Care Gold is a product tailored specifically for individuals with disabilities and those who are HIV positive. The Star Group Health Benefit plan offers critical illness cover up to 4 critical [Indiscernible], the personal accident cover, hospital cash cover and EMI protect due to hospitalization. It also covers health indemnity and health indemnity [Indiscernible].
We are launching a new wellness proposition for our customers as well as noncustomers who will benefit from our telemedicine expertise and also earn rewards from leading healthy lifestyles. We have already begun work with an [Indiscernible] firm to provide wellness benefits to our customers. We see this as a big opportunity area in the near future.
I will now request Dr. Prakash to talk about claims and the financial part of it.
Thanks, Anand. I'm going to talk about claims initiatives and the outcome. We are working on a 4-pronged approach to effectively manage claims outgrowth. Number one being prudent claim settlement based on our rich medical expertise and insurance system. Number two, well-negotiated volume-based pricing arrangement with our network hospitals, which gives us operating leverage in terms of lower average claim paid policy -- average paid per claim, sorry. Number three, being technology-enabled fraud detection and mitigation. And number four, risk-based pricing through micro segmentation of portfolio.
So with regard to cash flows, 73% of number of paid claims in the financial year '23 are through cashless versus 63% in the previous financial year. In terms of amount paid through cashless, it is 80% in FY '23 compared to 71% of FY '22. Cashless turnaround time that is claims settled within 2 hours came in around 90%. We also have auto adjudication of claims and this helps in drastically in improving the turnaround time and thereby customer satisfaction.
21% of hospitals representing 59% of cashless claims have been onboarded successfully under this initiative. The number of such claims settled has risen to 45,000 in Q4 FY '23, a growth of 13% versus Q3 FY '23.
We continue to improve on claims-related milestones within overall cashless claims, the share of hospitals with proper pricing arrangement, what we call as agreed network hospitals. The cashless claims is 67% versus 64% in FY '22.
As you will be aware, fraud control is one of the typical factors to address in a retail business. Our antifraud digital initiative has become operational this year and has started to produce savings in claims of both. There is a 1.3% incremental benefit in terms of lower claims ratio in FY '23 versus FY '22 and SaaS platform has assisted in 55% of those cases. This is in line with our expectation of more than 1% reduction in claims ratio mentioned in the previous results call.
Let me talk about our financial performance. We are focused on sustainable profitable growth and taking decisions to achieve that goal. Our combined ratio for full year FY '23 has improved to 95.3% versus what was 117.9% in FY '22. This improvement in combined ratio is achieved through claims ratio and expense ratio improvement. Combined ratio for the quarter Q4 FY '23, is 91.3% versus 98.4% in Q4 of FY '22. Claims ratio for FY '23 has improved to 65% versus 87.1% in FY '22. FY 2023 claims ratio as impact 0.4% of COVID-related claims.
The claims ratio in Q4 effect to decrease has improved to 62% versus 68.1% in Q4 of FY '22. So the expense ratio has fallen in FY '23 to 30.3% versus 30.8% for FY '22 on account of efficient cost control and management. For Q4 FY '23, expense ratio has reduced to 29.4% from 30.3% in Q4 FY '22.
You will appreciate that the expense ratio has improved in spite of a significant cutback in the group business. And group business, as you all know, has a lesser expense ratio.
Our investment assets have grown to INR 13,392 crores in FY '23 versus INR 11,373 crores in FY '22. With the rise in interest rates, fresh investments were deployed at a higher yield, leading to the fixed income portfolio yield for Q4 FY '23 rising to 7.34% versus 6.71% of Q4 FY '22. We continue to invest in equity portfolios through [ ETFs ]. The investment income in Q4 FY '23 grew by 21% over Q4 FY '22 to INR 218 crores over INR 180 crores in Q4 of FY '22.
And for the financial year '23, investment income grew to INR 835 crores versus INR 793 crores for FY '22. So FY '23 recorded a profit before tax of INR 826 crores and profit after tax of INR 619 crores. Adjusted profit after tax, excluding non-business ESOP cost and [Indiscernible] is INR 768 crores for financial year '23.
For Q4 2023, the profit before tax is INR 136 crores and profit after tax is INR 102 crores.
Solvency as on 31st March 2023 is 2.14x compared to the regulatory requirement of 1.5x. This solvency is achieved despite our reinsurance mandatory is only 4%.
To conclude, we continue to believe in the profitable growth opportunities available in the retail health segment, and we are on our [Indiscernible] path of realizing the same. Thank you.
[Operator Instructions] The first question is from the line of Avinash Singh from Emkay Global.
A couple of questions. First one is, again, first one is on rather broader growth trend. I mean, if we see the growth for margins despite the fact that you took up price hike on new products, yet the growth was sort of a softer. So I mean, what sort of growth outlook you have considering that, okay, from [indiscernible] price hike on renewals? So that's on the growth.
Second is on terms of your profitability side, if I mean, -- so what would be your kind of aspiration for FY '24 in terms of combined? And if at all improvement versus FY '23 considering the market dynamics on the commission and expense annual growth [Indiscernible] what sort of improvement would affect on the claims as well as on the OpEx side?
Okay. Thanks, Amit, for the question. On the growth side, the company, as you know, has been beating the industry as far as our retail growth is concerned. We believe that we will continue to grow faster than the industry's growth on the retail side. And as we can -- as I have already disclosed in -- our April performance seems to be very, very promising, and we expect to maintain the momentum. Though we are not giving any particular guidance, but we will grow faster than the industry's growth.
As far as the combined is concerned, definitely, as you mentioned, along with the credit lines and all the efficiencies that we are building and through technology and other initiatives that we are taking, the combined operating ratio will definitely be lesser than what we have achieved last financial year, and we hope to achieve that through all the initiatives that we are driving.
The next question is from the line of Sahej Mittal from HDFC Securities.
Congratulations on good set. So 2 questions from my side. So a road map on any new planned ESOP issuances? That is one. Second is looking at the product level loss ratios, do you plan to take a price rise in any other product? Yes, that was second.
So basically, [indiscernible], which will not have any impact on the profit and loss account of the company that has happened for the last few quarter. But it also [Indiscernible] market price. On the product level loss ratio, Sahej, we continue to monitor all the products. And whenever a product is a threshold level, we go in for a price increase, and that's a continuous process. So we'll continue to monitor the loss ratio of every product.
Right. And if you could split out the 25% growth in the month of April, what is on back of new product, new policy sales and what is due to the rise in premiums?
We are in the middle of the month side. We'll get back to the specifics, we're at the initial period at this month.
The next question is from the line of Swarnabha Mukherjee from B&K Securities.
So 3, 4 questions from my side. First of all, in terms of your recent growth, so just wanted your thoughts or if you could give some color on what happened in March in retail health that presenting a slower month and also April number, whether this 25% kind of number, which you highlighted, is this in retail or [Indiscernible] end up 2, if you could give us a breakdown between retail and group, even indicative number if you can share, which is growing by how much? So that is the first question.
Second is in the fourth quarter, the new business growth looks very strong vis-a-vis what was in the earlier quarter. So if you could give some color on any trends that you are seeing?
Thirdly, I wanted to know your thoughts on the group's related strategy. So what is different in the group-related strategy right now vis-a-vis how it was before we had started to bring it down in the previous cycle?
And lastly, a very quick small thing that I wanted to understand was that it looks that when you started the year, our share of specialized product was higher than 17% in the mix towards the end of the year, it has come down to 15.5%. So anything to read into that? So these are the 4 questions, sir.
Thanks. So to answer your first question, the retail growth in the month of March, I think the growth rate in the month of March was good. If you look at the pecking order of the volume of business generated by all general insurance companies, I think Star Health is #1 or #2, even considering all lines of business for others in terms of the volume. So the business continues to grow fast. And April month, we are looking at more of a heterogeneous growth from all lines of business, both from retail as well as from our group businesses.
As I mentioned earlier in my previous calls that the group business strategy of running down the book was up to the last financial year. We are continuing to focus on profitable groups, which is largely the SME segment. And so the growth is coming back on those group business also. So there is a growth across all those segments.
As far as the specialized products, which you asked about, specialized products continues to be our focus area. It has come down probably because of certain underwriting costs we took on 1 or 2 products, but that is part of our overall strategy and our focus continues to be on specialized products.
The decrease is also only relative because we have today some of new products like Health Assure and premier and women care, since people are preferring those new products probably, there is a relative decrease. But otherwise, the focus is on all profit-making products.
Sure, sir. That's helpful. Again, just a follow-up on the first question in terms of the April month growth. So would it be fair to assume that this is like fairly broad-based, right, the 25% kind of a number you mentioned?
Yes, yes. Absolutely correct.
The next question is from the line of Prayesh Jain from Motilal Oswal Financial Services Limited.
Firstly, could you break down FY '23 retail health growth in terms of number of policies and premium and value growth?
It's 50-50 value and volume.
The number of policies would have grown by how much?
50% is value growth and 50% is volume growth.
No. Can you quantify the number of policy growth?
So number of policy growth is 9%. We have grown by 18% in retail business. 9% is policy growth and 9% is value growth.
Okay. Perfect. And in the past, you have mentioned that your loss ratio will be in the range of 60% to 65% and combined will be in 93% to 95% [Indiscernible]. And when you mentioned that for the April month, your loss ratios are better than last year, do you mean the exit rate of last year or the entire of last year? And what would be your guidance for FY '24 on the [indiscernible]?
So, Prayesh, we maintain that we'll improve the loss ratio compared to full last year number. I mean 65% is what we mentioned will improve on that loss ratio in the current year. When you talk about EBIT loss issue, it is compared to full year loss ratio.
Okay. Okay. So -- and what about your guidance? Do you think 60%, 65% still holds and -- or it can be better than that?
Prayesh, we're likely to maintain that because we improved compared to last year.
Okay. Okay. And so from -- if you start thinking from an FY '24 growth perspective with the price hike that has been implemented, how should we think about the number of policy growth from maturity growth and price hike? How do -- how these 3 would have an interplay in terms of your growth? How would you see this?
So, as Anand sir, had mentioned that we continue to go higher than the industry growth rate and continue to improve on the market share. In terms of volume and value growth, it will be similar, slightly higher value growth this year because we have taken a price hike. It can be around 55% to 60% value growth and 40% to 45% volume growth.
Okay. And just in the past, you have also mentioned about getting into more affluent categories in terms of population. What are the initiatives that we're taking there and how is that progress happening?
So the fact that our average sum assured of our policies have gone up by more than 10% this is the last financial year. Gives an indication that the customers that we are now targeting a more affluent than what they were earlier. And also the awareness of health insurance and appropriate coverage has also kind of been established in the society at large. So I think a combination of both these things will help us to keep growing our average ticket size as well as the average sum insured, which we hope to achieve this year also.
The next question is from the line of Shreya Shivani from CLSA.
I have 2 questions. First is on the share of agreed network hospitals. So this number has varied quite a lot this year, like it was at 56% in first quarter and first half with 66%, 9 months, it's a 76% and now 67%. So I just want to understand how frequently do you rearrange your agreement with hospitals. Why did this number vary so much this year versus last year, every quarter, it didn't vary so much? So that's my first question.
Second is on the wellness program. Just wanted to understand how elaborate would this program be? Are you just partnering with your -- with some other fintechs? Or are you planning to launch your own separate web portal or if you can give us a little more details about this?
And also one last question is -- can you share the share of longer-term policies in your entire book as in the policies which are more than 1 year, 2 years or 3 years, the 2-year, 3-year policy, the share of plan?
With regard to the share of agreed network hospital to the overall hospital. Every month, you should understand that there are a lot of hospitals showing interest to be part of our impanelment. So we get around 200-plus applications from different hospitals. So naturally, the number keeps increasing. When the overall number increases, the share of ANH to overall number will definitely alter.
Apart from that, there is an exclusive team in Star to talk to hospitals and arrive at a fair pricing for identified surgical procedures and also to fix a proper price for medical management, room rates, professional charges, common diagnostic tests and all that. So our pricing arrangement with the hospitals will depend on the geography, the nature of hospital, whether they are surgical oriented or medical oriented.
There are lots of formulas involved to arrive at the pricing with the hospitals. So the [Indiscernible] new hospital show a lot of interest to be part of our panel. So there is a constant increase in the number of hospitals. And we are -- our impanelment -- impaneled hospitals have crossed 14,000. And there is a constant effort to convert most of these impaneled hospitals into our agreed pricing.
And this strategy is also continuing. That is the reason why you are seeing a difference in the percentage. But overall, the financial transaction and turnover as we could trade, it is more with hospitals that we have a pricing arrangement. So more number of claims are processed in hospitals where there is a proper pricing arrangement.
Second, with regard to wellness, we are having a program, the structured way of organizing wellness rewards for young customers who want to be our policy holders. We want to recognize maintenance of good health and give them a discount on the premium. So based on the scores that they could achieve.
Second thing is the number of people who are with the elderly people, people who are suffering from a lot of comorbid conditions, we have condition management programs and structured wellness program to educate them, to rehabilitate them and encourage them to have proper diet and lifestyle changes so that they don't fall within to diseases.
Through this strategy, we have also found that our readmission rates are coming less and we could address areas of our -- in geographies where our customers live with multiple comorbids, and we are trying to decrease the frequency rate of claims in those areas. So there is a structured and ordinate way of conducting our wellness program, and we are closely monitoring the outcome.
Sir, my question here on the wellness program is that this program is for your existing insurance -- the policy holder. It's not like you're opening a platform to all set of customers. And from there, you may want to convert them into insurance holders. Which way is it?
So see, it is a mix of both the things that you mentioned. For our policy holders, we have a structured wellness program on -- as part of the policy, as Dr. Prakash mentioned, by which if they are taking care of their health and their able to demonstrate those results on our application. We give them a premium discount at the time of renewal.
But even for noncustomers who are not yet with Star Health, we have a wonderful free telemedicine service, which gives advice and guidance to anybody for various kinds of ailments that they may have. And it is absolutely free of cost. This definitely is a channel by which we are able to generate leads for potential customers, and we intend to scale that up even significantly.
We also do have tie up with the fintech firm for the services of all our wellness-related program in case of how they can have the technology integration of their IoT devices into our app so that they can submit their data.
As far as your last question of the long-term policies is concerned, about 2.5% of our policies are coming from long-term plans, which are more than 1 year old. But this is an area where we are going to focus more. And we have seen that on the online platform, there are our digital channels, almost 50% of our new customers in the recent past is coming from long-term plans. So we will be focusing on these plans going forward.
[Operator Instructions] The next question is from the line of Anirudh Shetty from Solidarity Investment Managers.
Sir, my question was more on our return on equity, which for FY '23 is around 12.5%, which is very close to cost of capital despite us getting our loss ratio to the upper end of our target of 63% to 65%. So my question is for us to get to a healthy ROE of, say, at least 15%, 16%, what needs to improve for us? And also, if you could give us any time lines on -- by when do you think you can get to that number?
ROE of 12.4% is basically after the ESOP cost, which is the onetime non-business cost. So we exclude that the ROEs are much higher. So next year, again, will be 1 full year with price increase that we have taken, which should return to healthy ROEs of 16% to 18% that we have been talking about.
Got it. So 16% to 18%. And sir, right now, there is also a bit of an accounting anomaly because of the mismatch. So the 16% to 18%, if one were to look at it at a -- there's a proper matching or say there was an IFRS implemented, how would this ROE look like in that scenario?
So once we implement IFRS the cost is deferred over the policy period. Today, only the premium is deferred, whereas the cost is upfront. If we defer the cost also over the policy period, this should improve by another 300 to 400 basis points. The ROE will be further improve.
And could there also be an implication of, say, if risk-based kind of solvency is introduced, then given the nature of the business that we are in very granular could that also be ROE accretive?
See, the risk-based solvency will ensure that the solvency for us will be very, very comfortable. I mean indirectly, it will benefit us because today, it's been a growth business. And as we keep on growing the business, we need to keep capital. But once risk-based solvency come in and we are profitable, we will be in a position to pay dividends as well. This will -- there is we can maintain a healthy solvency, we can pay out dividends also.
Got it. And just one final question. At this point in time, how much of our portfolio would be in equities? And over time, where do we see that number go heading to?
This is Aneesh here. So as of now, 4.1% of the portfolio is in ETFs. We have decided to increase the ETF exposure. Maybe that we would go up to 7% and then decide [Indiscernible] later.
The next question is from the line of Sanketh Godha from Avendus Spark.
Anand, you said that the growth in April is coming from both group and retail and probably in FY '23, the group contribution was -- is at the lowest level in the last 5, 6 years. So if the group is going to contribute around 10 to 11 percentage of the total GWP in FY '24, then is it safe to assume because group [Indiscernible] has a higher loss ratio than the 65% loss ratio, could we still be maintained in FY '24 because share, share change in the product mix?
Yes. Sanketh, see, as I've mentioned in the past, our business strategy is very clearly focused on growth with profit. So we do not intend to write groups which are loss making in nature. So our focus on groups are also on the SME segment, which I mentioned. [Indiscernible] model, the group business also comes through our traditional channels like agency and digital channels. So we are very confident that even with the 10% group that we intend to write our loss ratio should not go beyond what we are envisaging.
Sir, is it safe to assume, Anand, that in previous -- when we did the business around [Indiscernible] the loss ratio experience in group is very similar to retail or it was stand higher?
Should look at combined.
Okay. Yes, fair point. I should look at combined because the OpEx associated to the business [Indiscernible], right?
The next question is from the line of Ansuman Deb from ICICI Securities.
My question is first on the combined ratio guidance. So we're saying it is lower expected compared to FY '23, '24. Is it backed by any improvement in experience as far as severity and frequency is concerned? And maybe some of the fraud prevention practices that we have been incorporating because as an industry level phenomena or a company level phenomena, if you could help us understand that?
And secondly, on the growth that you are expecting in FY '24, does it factor any benefit from expansion of tie-ups with new branches or any regulatory benefits are being factored within this assumption? These are the 2 questions.
So basically, the combined ratio improvement will happen on account of the strategic initiatives that we have been taking and that will bear fruit in terms of the financial outcomes. The product mix, business mix change that we have done over the last year and we continue to do. As we have been saying, the EOM regulations would be beneficial because EOM regulations as well as the opening up of the [Indiscernible] business to 9 players. That is something which we look as a big opportunity areas, which will help us to get into newer channels and continue to grow our profitable mix of business.
The next question is from the line of Sanketh Godha from Avendus Spark.
Dr. Prakash, you said that around 1.3 percentage improvement in the loss ratio happened because of the fraud reduction in FY '24, which was in -- FY '23, which was a new initiative. Sir, just wanted to understand that low hanging tours with respect to the fraud reduction exercise is almost exploited or there is in your opinion, how much headroom is further available to reduce the loss ratio just to buy better, better fraud management?
So one cannot determine the headroom because there is always newer trends of fraud that are emerging in the market. We are keeping our eyes closed. With our experience of handling more than 90 lakh leads, we have identified probable areas which are prone for fraud appeals and leakage. And using those intelligence, we have created a ruling chain, and we are able to identify those vulnerable claims, which are more prone for fraud and dig them and study them so that we can filter those fraudulent claims as they come to us.
Got it, sir.
Just to add one more thing. This initiative started in the second half of the year. So FY '24 will be the first full year of benefit that will come through on account of the fraud initiatives.
Got it. Got it, Aneesh. And last one, if you can respond to this. In your experience, what is the average ticket size claim difference for ANH hospital versus other hospitals. And related to it today, today, 67 percentage is ANH. What you aspire that number to be in FY '24, like maybe upwards of 70 or any internal target you have to achieve that particular number?
See, this cannot be an apple-to-apple comparison because the average network for hospitals -- based on specialty, I should compare the average decrease in [Indiscernible] between hospitals of ANH doing only cardiac, doing only cancer treatment, doing only trauma and orthopedic, something like that. So overall, it will be very difficult for us to arrive at what is the value addition but that is a greater financial benefit that we could see when -- like more and more transactions happen through agreed network hospitals.
Got it, sir. And then the 67% of what you expect it to be in '24 given the benefits in loss ratio, sir?
Sanketh, we'll keep on improving on that initiative. We have not set any targets for a 1-year period.
Because this benefit, some of them are tangible, some of them are intangible. So it's very difficult to measure and tell you. But overall, we are seeing a lot of improvement and a benefit of that.
The next question is from the line of Supratim Datta from Ambit Capital.
[indiscernible]. So it looks like you are to [indiscernible] for the year FY '23 to the NWP. That ratio is around 58%. And you were previously decided that would be around 56%. So just wanted to understand what could resulted in this higher ratio in FY '23?
See, basically, the [indiscernible] is a function of growth in business. So it is dynamic. It's not a constant number. If the growth is constant, it will be a constant number. But depending upon the growth being higher or lower compared to last year, if we keep on fluctuating.
So is it fair to assume that you had [Indiscernible] the later weeks of March. That's why there is increase?
Yes.
Okay. Got it. Got it. And on the sale analysis you talked about 1% lower loss ratio. Just wanted to understand what are the initiatives you have going on, on that and in our initiative and the [Indiscernible] of improvement, further improvement do you expect from those?
So you're talking about the fraud initiatives which has resulted in incremental 1.3% of improvement, right? In quarter 4?
Yes.
Yes. So it's an ongoing initiative that we improve on the fraud control and management, the ANH network that we continue to improve. We continue to negotiate rates with the hospital. That's an ongoing initiative, and it will continue to give benefit to us.
Got it. Got it. And what proportion of your ANH hospitals would be having packages of those ones which will not be having package?
Yes. So basically, the ANH network -- the hospitals where we have packages, that 67% ratio that we have.
The next question is from the line of Devansh Nigotia from SIMPL.
Sir, in case of Family Health Optima after the price increase is taken, you've seen that our pricing is actually a 15% to 25% premium to our peers. So what do we think with such high pricing, do we see a risk of drop out being more than 5% that we are expecting for FY '24? And also, what you're seeing is that the company itself is actually pushing Star Comprehensive instead of Family Health Optima for the family floater policies, which is actually at a 12% to 13% discount to Family Health Optima. So I mean, if you could just share some perspective over here or how you see the family health policy mix evolving for FY '24?
See, our family floater portfolio continues to grow well. And overall, at a company level, we are tracking that, how does the family floater portfolio perform. And there are 4 products that constitute this portfolio. So Family Health Optima price revision initial response, we have not seen any negative outcomes. We are including the 4 products that I mentioned about as long as the portfolio is growing, we are okay with that.
And in case of -- from [Indiscernible] the experience that we have seen, for the new sales, how does the mix evolve within family floater? Is it -- I mean, has there been a tilt towards the Star Comprehensive instead of Family Health Optima or how does the portfolio shape? Because their pricing is actually a 12%, 13% discount. So it's been actually 2, 3 months since the price increase has happened. So any data point if you can share?
We are seeing a balance between these products, Star Comprehensive, Star Assure, Family Health Optima. As you know, we have region-based pricing. So some regions, Family Health Optima is more attractive for the customers. Some regions, the features of Assure is more attractive to the customers. So it's being sold on those bases. But as I told you at the portfolio level, the company continues to grow on the family floater portfolio. And I think that's why we have more interest in there.
And thirdly, Family Health Optima pricing, price increase has happened from 1st April or from which date that has happened for the renewal portfolio?
It's bound to happen from second of May onwards.
Second of May, okay. So but we are yet to see the experience in the in case of renewals, how it will shape up.
Yes.
And in case of bancassurance, since now that the wallet share is with now 8 insurers can be onboarded instead of 3. So are we looking to target some large banks, which can actually create a meaningful difference in our benefit-based book, which currently is negligible. So any thought process if you can share? And what can be the constraining effort to impanelize ourselves with the large banks?
So there are no constraints. All banks who are interested in growing the health insurance portfolio are talking to us. And now as you understand that with the new EOM regulations, which has been brought in by the regulator, we are also engaging in discussions with them. As I've already mentioned in my speech that we have signed up 3 banks in the last quarter, which is India Post Payments Bank, Standard Chartered Bank and [Indiscernible]. We will continue to add more and more banks as we go forward.
So are we trying for large banks because all the banks that we mentioned for [ banca type ] are actually relatively small. So that is why the question was targeted towards large-sized banks.
We are interested in partnerships where Star Health is also gaining. We are not interested in any partnerships, which is not viable for us. So we will continue to talk to them, and we will see how it works. We are also on some large NBFCs. I think some of them will be announced very soon.
And the investment in that you shared for the quarter was 7.34. So does that include some M2M gains that we have booked in our bond book? And what is the yield we are working with for FY '24 and '25?
So obviously, this does not include any mark-to-market or any book profits, there are no book profits as such. Guidance is slightly difficult to give. But yes, what we understand is that perhaps yield curve would remain somewhere here only given the fact that RBI is on a loan cost. So I think we would keep getting interesting opportunities for deployment.
So 7.34 is sustainable for the year if considering the interest rates are constant?
Sorry to interrupt, sir. May we request you to please rejoin the queue for follow-up questions.
[Operator Instructions] The next question is from the line of Pallavi Deshpande from Sameeksha Capital.
Just wanted to know on the number of agents you mentioned, how many of those 96,000 would be exclusive agents that you added this year and compare that to the same number last year?
So the exclusive agent that we have added this year is close to 18,000. And it would have been the similar number last financial year also. So [indiscernible] agents is a focus area. We are also looking at growing this channel very, very fast. So we will continue to focus on this.
Sorry, I didn't catch the last part.
So we added 18,000. 1-8.
Right. Okay. And the target for this year would be how many?
So we aspire to do at least double this, but I think we should do better.
Right. And sir, secondly, you mentioned about overall on the fraud reduction. So that was a half year period that you got this benefit. And so just on that side, if we want to estimate that for the next year, we just -- we can assume some -- to just double that up? Or I mean, how do we look at it?
So whatever work we have done will continue to get the benefit for the full year next year. This year, it was only available for 6 months period, but next year, it will be full year, and we'll continue to improve on that number.
I'd now like to hand the conference over to Mr. Nilesh Kambli for closing comments. Over to you, sir.
So thank you, everyone, for joining the call. And we are really very happy to announce profitable results with improved operating profitability for the full year post listing. Thanks for the trust and confidence, and we are sure we will continue to do well. Thank you all.
Thank you. On behalf of Star Health and Allied Insurance Company Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines.