Care Health (Previously Religare Health) Insurance Company Limited Unlisted Shares

Annual Report Summary

The following is a summary of Care Health Insurance Limited's 17th Annual Report for 2023-24. The report highlights the company's financial performance, insurance products, business operations, governance structure, and corporate social responsibility initiatives.

Financial Performance:

Care Health Insurance reached a total revenue (GWP) of Rs. 7,022 cr this fiscal, which is a ~34% increase over FY 2022-23. The company maintained a healthy solvency metric of 1.74. The Gross Domestic Premium Income (GDPI) rose to Rs. 6,864 Crores from Rs. 5,142 Crores, a growth of 33.51%. Underwriting profit was Rs. 7.19 crores. The Profit Before Tax (PBT) was Rs. 410.06 crores, and the Profit After Tax (PAT) increased to Rs. 304.89 Crores, a growth of 24.02%. The combined ratio was 95%. Net worth at the end of the financial year was Rs. 2,169.82 Crores. A profit reserve of Rs. 468.91 crores was created.

Insurance Products: Care Health Insurance offers a range of insurance products across health, travel, and group insurance categories. Noteworthy products include Care Enhance, Care Heart, Care Freedom, Care Advantage, Care Supreme, Arogya Sanjeevani Policy, Corona Kavach, Senior Health Advantage, and Protect Plus (Add-on). Retail Health Indemnity Products are also offered, including Care, Care Advantage, Care Supreme, Care Classic, Care Freedom, Care Heart, Care Plus, Enhance, and Super Mediclaim. The company has designed specialized products for every segment.

Business Operations & Credit Rating: Care Health Insurance completed 12 years in operation and has a customer-centric approach. It has a 260+ branch network with close to 9,500 employees, 2.8 lakh health planners, and partnerships with 24,800+ cashless healthcare providers. Their Customer App has nearly 5 million downloads. In January 2024, INDIA Rating upgraded Care Health Insurance Limited's sub-ordinated debt rating to 'IND A+/Stable'. In May 2023, CRISIL assigned its 'CRISIL A+/Stable' rating on the corporate credit rating to the company, which was later withdrawn in May 2024 at the request of CHIL.

Future Outlook: The company plans to increase its distribution footprint through Agency, Banks, Brokers, and Digital channels. It intends to intensify efficient application of technology.

Investments & Reserves: The company's total Assets under management as of March 31, 2024, stood at Rs. 6,605 Crores, bifurcated between Shareholders portfolio (Rs. 2,107.85 Crores) and Policyholders portfolio (Rs. 4,497.15 Crores). The returns generated in Shareholder and Policyholder portfolios were 7.15% and 7.09% respectively. 37.50% of the portfolio is invested in Sovereign securities. The company transferred Rs. 304.89 Crores towards the reserves and surplus.

Share Capital: The authorized share capital is Rs. 1300,00,00,000 divided into 130,00,00,000 equity shares of Rs. 10 each. During the financial year, the company received additional capital of Rs. 1,15,74,80,437.44 due to the exercise of ESOPs for 2,98,13,094 shares.

Governance & Committees: The Board of Directors includes 12 members. Committees of the board include mandatory committees such as the Audit Committee, Investment Committee, Risk Management Committee, Policyholder's Protection Committee, Nomination & Remuneration Committee, Corporate Social Responsibility Committee, and Stakeholders Relationship Committee; as well as non-mandatory committees such as the Allotment Committee and the Initial Public Offering (IPO) Committee. There were changes to the board, including the end of the term for Chander Mohan Minocha and appointments/resignations. The composition of the Audit Committee, Investment Committee, Risk Management Committee, Policyholders Protection Committee, Nomination & Remuneration Committee, Allotment Committee and CSR Committee are detailed.

Key Managerial Personnel (KMP): Anuj Gulati (Managing Director & CEO), Pankaj Gupta (Chief Financial Officer), Ajay Shah (Chief Marketing Officer), and others are listed as Key Managerial Personnel.

Policy on Directors Appointment and Remuneration: Care Health Insurance has formulated policies in accordance with the Companies Act, 2013 along with applicable IRDAI Regulations and Guidelines. These policies are reviewed, updated and approved by the Board from time to time.

Vigil Mechanism: The Company has a Whistle Blower Policy. The Chairperson of the Audit Committee is the Ombudsman of the Company.

Sexual Harassment Policy: The Company has formulated the Policy on Prevention of Sexual Harassment at Workplace in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013. There were no complaints received or disposed of during the financial year 2023-24.

Employee Stock Option Scheme: Details regarding options granted, vested, exercised, and lapsed are provided.

Auditors: M/s S. P. Chopra & Co. and M/s Nangia & Co. LLP serve as joint Statutory Auditors.

Corporate Social Responsibility (CSR): The company's CSR activities focus on consumer awareness and protection, eradicating hunger, poverty, and malnutrition, promoting healthcare, ensuring environmental sustainability and ecological balance, supporting skill development and generation of employment, and promoting education. For FY 2023-2024, the company's CSR obligation was Rs. 2,79,34,054, allocated to renovation projects and support for the Army Wives Welfare Association (AWWA). The Company has utilized funds in the "Unspent CSR A/Cs”. The detailed CSR Policy is available on the company's website.

Significant & Material Orders Passed by Regulators/Courts/Tribunals: The report indicates no orders passed by any regulator or court impacting its going concern status. However, subsequent to the financial year-end, IRDAI directed the company to comply with specific directives related to Dr. Rashmi Saluja. These directives included a buyback of shares, cancellation of unexercised stock options, and the requirement of prior IRDAI approval for any remuneration decisions made by the Board of the Company. The Board of Directors of the Company preferred to file an appeal before Securities Appellate Tribunal (“SAT”), Mumbai against the above Order. Upon hearing of the matter on August 09, 2024, the SAT passed an Order dated August 09, 2024 stating as under: the directions contained in Paragraph 22 (a) & 22 (b) of the Order pertaining to the Buyback of 75,69,685 shares of the Company allotted to Dr. Rashmi Saluja & Cancellation and Revocation of unexercised and / or unvested stock options of Dr. Rashmi Saluja, shall remain stayed for a limited period of 12 weeks with liberty to the respondent to seek vacation / modification of the order after filing the reply. Dr. Rashmi Saluja shall not deal with the 75,69,685 shares of the Company in any manner and maintain status quo in respect of these shares and shall not exercise option in respect of unexercised and, or unvested stock options of the Company, if any. The directions contained in Paragraph 23 of the Order pertaining to payment of penalty of Rs. 1 Crore (Rupees One Crore only) by the Company shall remain stayed subject to deposit of 50% of the penalty amount within four weeks from the Order. The same shall be kept in an interest bearing account with the IRDAI. As on the date of this report, the matter is fixed for hearing before SAT on September 27, 2024.