GST rate rationalisation likely to drive growth in life and health policies

GST reduction is expected to enhance affordability and boost life and health insurance sales, especially among price-sensitive segments, though concerns over ITC impact persist

Amid muted insurance penetration, the rationalisation of goods and services tax (GST) rates is expected to boost sales of life and health insurance among price-sensitive customer segments by making policies more affordable.

 

According to the Insurance Regulatory and Development Authority of India’s annual report, insurance penetration in India stood at 3.7 per cent in 2023-24 (FY24), down from 4 per cent a year earlier. Non-life insurance penetration remained flat at 1 per cent, while life insurance penetration increased slightly to 3 per cent from 2.8 per cent. Growth in health insurance has been constrained by affordability concerns amid high medical