GST waiver alone not enough to deepen penetration: Insurers

The recent goods and services tax (GST) reforms are a landmark step towards making insurance more affordable and inclusive in India.

- AATHIRA VARIER

The exemptions will help reduce insurance premiums, enhance affordability, and signal the government's strong focus on insurance as an essential life necessity, the chiefs of four life insurance companies said at the Business Standard BFSI Insight Summit 2025.

In a session moderated by Manojit Saha of Business Standard, Ratnakar Patnaik, managing director (MD) of Life Insurance Corporation of India (LIC), said: "I agree this (GST exemption) will help insurance grow, it will become affordable. But at the same time, GST waiver alone will not help to increase penetration as such. It will surely facilitate it, but by itself is not sufficient to increase the penetration levels."

In early September, the GST Council announced a tax exemption on all individual life and health insurance policies, and their reinsurance was also exempted to boost penetration.

"It will surely help to bring down prices and increase penetration. Insurance is not a product which people will stand up tomorrow and buy. I would say for some time in September, it did happen. For a few days it did happen. That is a good indicator. But we will have to keep this alive in the mind of the customer, ensure that we take it to every household, let them know the benefits of bringing the prices down and increasing the sum insured," said Tarun Chugh, MD & CEO, Bajaj Life Insurance.