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The development is notable as it comes a day after Rajya Sabha passed insurance Bill which will raise the upper limit of foreign direct investment (FDI) to 49% from 26% now.
Star Health is backed by ICICI Venture, Sequoia Capital, Oman Insurance Company, Tata Capital, non-resident Indians and Indian business houses.
Commenting on the government's move to increase FDI cap in insurance, Jagannathan said: "It is very much essential considering the fact that insurance is a capital-intensive business with a turnaround time of six-to-seven years."
He added, other good thing is apart from life and general insurance, third vertical - health insurance - is created this will enable better penetration. Today health insurance is in nascent stage with about 4-5% in the country. Penetration of health insurance in India is expected to increase from the current 15% to 45% by 2020, according to reports.
Jagannathan, who has 40 years' experience and has served as the chairman and managing director of one of India's largest public-sector insurance companies, said, "at the current scenario, it is better to let the foreign capital to come in."
Star Health clocked around Rs 1,050 crore in Fiscal 2014 as 'gross direct premium underwritten' and set a target of Rs 1,500 crore for the current financial year. He claimed that the company reported highest growth in the industry at around 34%.
The company, which was largely focusing on government sponsored insurance schemes, now deals in personal accident, mediclaim and overseas travel insurance.
The insurer also said next year onwards it will show balance sheet profit, said Jagannathan, adding that the company would look at IPO in the next two years.
There are 28 general insurers in Indiat and Star Health is one of the five companies focusing on health insurance. Other companies include Cigna TTK Health Insurance Company, Max Bupa Health Insurance Company, Religare Health Insurance Company and Apollo Munich Health Insurance Company.
