 "Awareness, risk management key to insurance growth: Leaders at BFSI Summit")
Insurance industry leaders agreed that while the proposed goods and services tax (GST) waiver could support penetration, it cannot, on its own, transform the sector.
In a panel discussion on the topic "Will GST waiver improve penetration?" at the Business Standard BFSI Insight Summit 2025, Ratnakar Patnaik, Managing Director (MD) at Life Insurance Corporation (LIC), said, “GST waiver alone will not help in penetration levels."
He further said that awareness and training are essential to the insurance sector. "Our priority has always been the customer. Customer first is our focus," he added.
Patnaik said that term insurance still has a "big room for improvement", noting that the average death claim is less than ₹3 lakh, which highlights the need for stronger financial awareness. He also shared that 95 per cent of LIC’s business is sourced via agents, adding that commissions for agents are expected to grow multifold in the coming years as distribution expands. CATCH BUSINESS STANDARD BFSI SUMMIT 2025 UPDATES LIVE
Education, collaboration needed
Tarun Chugh, Managing Director and Chief Executive Officer of Bajaj Life Insurance, said that insurance is not a product people buy out of choice, because there is a lack of awareness. “Insurance is not something that people will buy. GST was a significant part for term plans and we have to propagate more,” he said.
Chugh identified four key stakeholders, including customers, manufacturers (the insurance industry), distributors and vendors, and added that the "last three need to work harder" to take the industry forward. “We have to get educational awareness and innovations on all fronts,” he said.
Risk management and efficiency at the core
Mahesh Balasubramanian, MD of Kotak Life Insurance, called insurance a “landmark reform” and said that it should not be treated as a luxury. “Insurance is a very essential aspect of life. It’s not a lifestyle spend; it’s a basic necessity,” he said.
He stressed that "risk management and operational efficiency" should be the industry’s focus. “We are focusing more on GST cuts but we need to see managerial risks. If we create wonderful risk management, our ability to issue policies instantly will give us more leverage,” Balasubramanian said.
He also said that keeping people healthy is the best long-term gain for insurers: “If you can really keep a person healthy, that’s the best thing that can happen to an insurance company." ALSO READ | India needs bigger, more global-scale banks for 2047 goal: Banking leaders
Affordability improving, but growth remains key
Anup Bagchi, MD & CEO of ICICI Prudential Life Insurance, highlighted that discussions around life insurance have become more constructive due to rising affordability. “Positive discussions on life insurance are happening for the first time with this intensity, and it has come because affordability has improved,” he said.
Bagchi further said that customers seek "small premiums, large covers, early issuance, and instant settlements". However, he cautioned that affordability alone would not help in achieving long-term goals.
“Only thing that really matters is the growth of the industry. If there is no growth, nothing can get absorbed,” he said, adding that continuous product improvement remains vital.