Life Insurance News

Life insurers cut distributor commissions to pass on GST relief to customers

- 

Life insurers have decided to lower distributor commissions to ensure that the entire benefit of the Goods and Services Tax (GST) exemption on insurance premiums is passed on to customers, without revising product prices. The move, conveyed to the Insurance Regulatory and Development Authority of India (IRDAI) through the Life Insurance Council, will take effect from October 1.

Sources said insurers will offset the loss of input tax credit (ITC) due to zero GST by reducing distributor payouts by around 18 per cent. Letters have been sent to agents, and talks with banks are underway. The overall ITC impact for the industry is estimated at Rs.15,000 crore.

While insurers will not reprice products, they may adjust their product mix to protect margins. The revised commission structure will apply to both new and renewal policies, ensuring that policyholders receive the full benefit of the GST exemption.

Life insurers' new business premium rises 14.8% in September

The life insurance industry recorded a 14.81 per cent growth in new business premiums (NBPs) in September 2025, rising to Rs.40,206 crore from Rs.35,020 crore in the same month last year, according to data from the Life Insurance Council. Year-to-date (YTD) collections grew from Rs.1,89,214 crore to Rs.2,03,668 crore.

Individual single premiums stood at Rs.4,515.78 crore, up 4.99 per cent year-on-year, while individual non-single premiums rose to Rs.10,837 crore, marking a YTD increase of 2.16 per cent. The group segment saw the strongest performance, with single premiums up 32.39 per cent to Rs.22,574 crore and total group premiums up 35.23 per cent.

The industry also added 5,39,804 new individual agents during the period, registering a 3.71 per cent rise in total agent count. Insurers said the expansion reflects efforts to deepen coverage across underserved markets and increase financial inclusion.