Insurance GST Exemption-CUTOMER FIRST approch

 

As insurance industry professionals, we've had the privilege of witnessing its growth and evolution. The enduring strength of our industry isn't just built on policies and profits; it's founded on the deep trust and strong bond we've forged with millions of customers over generations.

Today, our industry faces a crucial challenge. As discussions unfold regarding the impact of the GST-exempt status on individual life and health insurance policies, I want to share my perspective. Without the ability to claim Input Tax Credit (ITC), there's a concern that insurance companies may be forced to increase premiums in the long run. My own preliminary back of envelop  calculations suggest this could lead to a modest rise in premiums: an estimated 3-5% for health insurance and 0.5-1.5% for individual life policies, these varying from company to company.

While some propose solutions like providing ITC on renewal premiums or specifically on distribution costs—our largest expense—I believe we must remain focused on a singular, non-negotiable principle: The GST-exempt status for individual life and health policies must be maintained, and the full benefit of any GST reduction must be passed on to the customer, both now and in the long term. Failing to do so would undermine the very purpose of this exemption, harm customer trust, and hinder the widespread adoption of insurance.

Our responsibility to customers extends beyond this one issue. While we work collaboratively with the government to secure a better deal on GST and ITC, we must also simultaneously commit to internal improvements. We owe it to our customers to:

·       Reduce management expenses and increase sales volumes to lower per-policy fixed costs.

·       Embrace technology like AI for lead generation and to improve our mortality and morbidity experience.

·       Improve operational efficiencies & Claims Payments  through digital transformation.

·       Enhance risk management and fraud control with advanced AI.

By committing to these initiatives and ensuring that all stakeholders share in the burden of any increased costs, we can guarantee that our customers benefit the most. This is the only way to ensure the continued and sustainable growth of our industry. The long-term prosperity of the insurance sector has always, and will always, be rooted in a "Customer First" philosophy. Let's honor that tradition by ensuring the well-being and affordability of insurance for those we serve.

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