Star Health shares rebound after hitting 52-week low; dismisses IRDAI probe reports

Shares of Star Health and Allied Insurance Company recovered early losses in intraday trading on Wednesday, March 26. The stock fell as much as 2.13% to hit fresh 52-week low of ₹339.85 on the BSE before staging a recovery. On the National Stock Exchange, shares of Star Health declined 2% to hit 52-week low of ₹340. The stock has been witnessing selling pressure for quite some time as it has dropped 47% from its 52-week high of ₹647 it touched on September 9, 2024.

Media reports suggest that insurance regulator Insurance Regulatory and Development Authority of India (IRDAI) has identified serious lapses in Star Health Insurance’s claim settlement practices. While investigations are ongoing, the regulator has also scrutinised 8-10 other insurers, though no action has been reported yet. The review primarily focused on claim deductions, and policyholder grievances.

Star Health in a notification post market hours on Tuesday clarified that media reports as "speculative and motivated in nature."

"We would like to highlight that IRDAI conducts regular audits and thematic inspections as part of its regulatory oversight, in line with the framework outlined in its master circulars. These assessments are a routine process to ensure compliance across the industry. The media statement appeared to be speculative and motivated in nature, and we have not received any communication on this subject from the regulator," Star Health said in a stock exchange filing.

According to the report hospitals in Ahmedabad claimed that delayed and reduced payments by insurance companies made it difficult to continue offering cashless services to policyholders of Star Health and Tata AIG.

Last year, Star Health suffered a data breach as personal data like mobile numbers, PAN, addresses and pre-existing medical conditions of about 3.1 crore customers of Star Health Insurance is allegedly available on a website created by a hacker identified as xenZen.

As of 11:00 am, Star Health shares traded 0.32% higher at ₹348.35 on the BSE outperforming the BSE200 index which was trading on a flat note.