Recent reductions in Goods and Services Tax (GST) have significantly boosted the sales of insurance products in India, particularly in the health and motor segments. According to a report by Business Standard, the combined effect of lower GST rates and festive season demand has led to a noticeable surge in policy purchases.
SBI General Insurance reported a 17% increase in motor insurance sales following the GST revision. Meanwhile, Star Health and Allied Insurance recorded an impressive 50% jump in new health insurance policy issuances, signaling strong consumer confidence and demand in the segment.
Health insurance continues to be the dominant segment in the general insurance sector, accounting for nearly 40% of the total premium share. Motor insurance follows, contributing around 30% of the industry’s gross premiums.
The withdrawal of input tax credit (ITC) — previously available to insurers on certain expenses — was expected to create a minor financial burden. However, most insurers believe the impact will be minimal and manageable. Health insurance providers are reportedly working with their distributors to balance costs and maintain affordability for policyholders.
Industry analysts attribute the recent growth to several factors, including heightened awareness of financial protection post-pandemic, increased vehicle purchases during the festive period, and the direct cost-benefit perceived by consumers due to the GST rate cut.
Insurers are optimistic that the momentum will continue, with expectations that improved affordability and stronger distribution strategies will drive sustained demand in both urban and semi-urban markets over the coming months.
