Star Health and Allied Insurance’s shift to selective underwriting, retail focus and tighter cost controls has led to an improvement in underwriting margins, with the insurer reporting a rise in underwriting profit and a reduction in loss and expense ratios in the June quarter. The company reported a 25% increase in its Q1FY27 net profit to Rs 550 crore from Rs 438 crore in Q1 FY26.Underwriting profit increased to Rs 111 crore from Rs 16 crore a year ago, as the combined ratio improved to 97% from 98.7%. The gross loss ratio declined to 67.5% from 68.5%, while the expense ratio fell to 29.5% from 30.1%.According to Nilesh Kambli, chief financial officer, Star Health the improvement follows a strategy initiated about 18 months ago to focus on risk-based pricing and portfolio selection. “We have been selective with our portfolio that we are underwriting. Risk-based pricing and portfolio selection… and avoiding certain geographies where the impact of losses is higher,” he said.The company has also reduced exposure to loss-making segments. It exited large employer-employee group business after incurring losses and shifted focus to retail and SME segments. “We will not write any large corporates… we are happy to lose this market,” Kambli said.As a result, group business has declined by around 50% and now accounts for about 2.5% of the portfolio, with retail contributing 97.5%. The company is focusing on SME group policies, typically with premiums below Rs 50 lakh, where pricing and competition dynamics are more favourable.Kambli said the underwriting changes, supported by data analytics, have resulted in four consecutive quarters of improvement in loss ratios. Expense ratios have also declined due to productivity gains from technology and digital initiatives.On the claims side, 81% of claims are cashless, with 90–93% of such claims approved within one hour. Around 10–12% of approvals are currently processed through AI-based systems.The company said its focus remains on growth with profitability and maintaining the combined ratio, which is aligned with its return on equity target of 15–16%. However, it expects seasonal variation in claims, with higher incidence in the monsoon and post-monsoon quarters.Kambli said competition in retail health insurance remains, but pricing typically varies within a 5–10% band depending on product features, with distribution and service being key differentiators.On regulatory changes related to commissions, the company said it is awaiting clarity but expects the changes to support efficiency in distribution and insurance penetration.