Care Health Insurance Reports Growth Amid Rising Claims and Profit Pressure

Care Health Insurance, a key player in India's standalone health insurance market, has experienced significant premium growth with ₹3,377 crore recorded in H1 FY26, surpassing the ₹3,137 crore from the previous year. This growth is driven by broad distribution across metropolitan and Tier 2/3 markets through agent-led and bancassurance channels. However, alongside expanding business volumes, the company is facing rapidly rising claims costs due to hospital-led inflation, with claims increasing to ₹2,480 crore from ₹2,043 crore year-over-year. Despite the increase in premiums, Care Health reported an operating loss of approximately ₹70 crore in H1 FY26, a shift from near breakeven in the prior year. This loss reflects growing claims expenses coupled with commission payouts of ₹627 crore and operating costs of ₹573 crore. The company passed a larger portion of risk to reinsurers, signaling a cautious approach amid escalating claims. Investment income of ₹222 crore helped offset some losses, maintaining positive profitability at the net level. Underwriting losses widened sharply to ₹70 crore compared to ₹3.58 crore in the previous period, underscoring that rising healthcare treatment costs are outpacing premium growth and expense reductions. This dynamic indicates that profitability challenges stem primarily from increasing medical inflation rather than demand contraction. Care Health's business remains robust, but earnings quality is under pressure due to structural cost inflation. Looking ahead, the company faces the strategic need to implement pricing adjustments and enhance claims management practices to restore margin stability. Industry observers note that underwriting discipline, rather than mere premium growth, will be a crucial factor in reversing the current profitability squeeze. The market impact includes potential pricing resets and heightened emphasis on claims control within the competitive Indian standalone health insurance sector. Overall, Care Health's performance highlights a wider trend of cost pressures amid expanding health insurance penetration, emphasizing the balance insurers must strike between volume growth and claims cost management. The insurer's growing retail footprint and partnerships position it well for continued expansion, but operational and underwriting efficiencies will be decisive for sustainable profit recovery.