‘After GST cut, innovation will boost life insurance’

The reduction in goods & services tax (GST) on individual life and health insurance premiums has been called a “landmark step” for making insurance affordable and inclusive.

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In a panel discussion at the Business Standard BFSI Insight Summit 2025, Anup Bagchi, managing director (MD) & chief executive officer (CEO) of ICICI Prudential Life Insurance; Mahesh Balasubramanian, MD & CEO of Kotak Life Insurance; Tarun Chugh, MD & CEO of Bajaj Life Insurance; and Ratnakar Patnaik, MD of Life Insurance Corporation of India (LIC), listed what else the industry needs to reach more people.

Edited excerpts:

Patnaik: I agree it will help insurance grow; insurance will become affordable surely. But at the same time, GST waiver alone will not help in the increase of penetration as such. It will surely facilitate but it itself is not sufficient to increase the penetration levels. We must take care of the protection gap which will further lead to improvement in penetration.

Chugh: It will surely help — when prices come down, products become more affordable. It will help to bring down the price and bring up penetration, but insurance is not a product which people will stand up tomorrow and buy. For some time in September it did happen — there was a milestone date of September 22—and that was a good indicator. But we will have to keep this alive in the mind of the customer, take it to every household, and let them know the benefits of lower prices and higher sum assured. We will have to educate people that it's a lot more affordable now. GST was a significant part, particularly for term plans, and we'll have to propagate that more and more.