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Star Health: From Star to Galaxy: Jagannathan, 79, to start new health insurance venture

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V Jagannathan, the founder of Star Health and Allied Insurance Company, is setting up a new venture in the health insurance realm.

At the age of 79, he’s launching Galaxy Health and has applied for R1, a preliminary licence application, with the insurance regulator to set up a new health insurance company.

“V Jagannathan has applied for the preliminary licence to set up a new health insurance company called Galaxy,” said a source. “Once R1 is received, they will work on the shareholding structure and most likely will bring in an equity partner.”

During the R1 stage of insurance company registration, the Insurance Regulatory and Development Authority of India (IRDAI) scrutinises documents such as the Memorandum of Association, annual reports, and business projections. They raise queries and seek clarifications before the regulator approves the R1 letter. This is followed by an R2 application, where the company needs to show paid-up equity share capital.

For his new Venture, Jagannathan is reportedly in discussions with the TVS Group for equity participation. In the previous venture, he had partnered with the ETA Star Group.

Former managing director of Star Health S Prakash has joined him in setting up Galaxy Health.Having established Star Health in 2006 and successfully listing it before stepping down in June 2023, Jagannathan is seizing the opportunity in the expanding health insurance sector. Health insurance is the fastest-growing segment within general insurance and is projected to grow at a compounded annual growth rate (CAGR) of 23% until 2030.

Having left nearly 17 years after founding India’s first standalone health insurance company, Jagannathan’s tenure at Star Health concluded on a high note.

Under his leadership, the company achieved a turnaround, posting a net profit of ₹618 crore and an underwriting profit of ₹204 crore in FY23, compared to previous losses. With a network of over 13,000 hospitals and a strong presence across south, west, and north India, Star Health has been a leading player in the industry.

Health insurance is the fastest-growing segment and the surge in health insurance awareness after the Covid pandemic has fuelled growth in the segment, with health insurance contributing significantly to the sector’s Gross Direct Premium Income (GDPI) in FY23. It is likely to cross ₹1 lakh crore in the current fiscal year.

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