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Life insurers cut distributor commissions to pass on GST relief to customers
Life insurers have decided to lower distributor commissions to ensure that the entire benefit of the Goods and Services Tax (GST) exemption on insurance premiums is passed on to customers, without revising product prices. The move, conveyed to the Insurance Regulatory and Development Authority of India (IRDAI) through the Life Insurance Council, will take effect from October 1.
Sources said insurers will offset the loss of input tax credit (ITC) due to zero GST by reducing distributor payouts by around 18 per cent. Letters have been sent to agents, and talks with banks are underway. The overall ITC impact for the industry is estimated at ₹15,000 crore.
While insurers will not reprice products, they may adjust their product mix to protect margins. The revised commission structure will apply to both new and renewal policies, ensuring that policyholders receive the full benefit of the GST exemption.
ICICI Prudential Life posts 19% rise in Q2 profit to ₹299 crore
ICICI Prudential Life Insurance reported an 18.9 per cent year-on-year rise in standalone net profit to ₹299.26 crore for the second quarter of FY26, supported by higher renewal and single premiums. The company’s stock gained 1.03 per cent to ₹599.65 after the results.
Total income fell 51.9 per cent to ₹12,015.64 crore, while profit before tax rose 21.2 per cent to ₹347.01 crore. Net premium income grew 10.1 per cent to ₹11,843.10 crore, driven by a 9.7 per cent rise in renewal premiums and a 25 per cent increase in single premiums.
For H1 FY26, profit rose 26 per cent to ₹601 crore. The Value of New Business (VNB) stood at ₹1,049 crore with a 24.5 per cent margin. Total premium grew 9.2 per cent to ₹21,251 crore, and retail new business sum assured increased 17.2 per cent year-on-year.
Ageas Federal Life, CSB Bank partner to expand SME insurance reach
Ageas Federal Life Insurance has partnered with CSB Bank under a bancassurance agreement to provide life insurance solutions to small and medium enterprises (SMEs) and individual entrepreneurs across India.
The partnership will enable CSB Bank’s 834 branches and 800 ATMs to offer integrated financial solutions combining credit, savings, and insurance. Customers can access tailored life insurance products to protect their businesses, wealth, and family financial security.
“By integrating protection products with CSB Bank’s offerings such as home and business loans, we aim to help customers build a protection-led financial journey,” the insurer said in a statement. The alliance is part of CSB Bank’s strategy to become a digitally enabled private sector bank providing comprehensive financial services.
Canara HSBC Life Insurance to launch ₹2,517 crore IPO on October 10
Canara HSBC Life Insurance Company will launch its ₹2,517-crore initial public offering (IPO) on October 10, with a price band of ₹100–106 per share. The issue will close on October 14, and shares are expected to list on October 17. The anchor book will open on October 9.
The IPO is entirely an offer for sale of 23.75 crore equity shares by promoters and existing shareholders. Canara Bank will offload 13.77 crore shares, HSBC Insurance (Asia Pacific) 47.5 lakh shares, and Punjab National Bank 9.5 crore shares.
Fifty per cent of the issue is reserved for qualified institutional buyers, 35 per cent for retail investors, and 15 per cent for non-institutional investors. The issue is managed by SBI Capital Markets, BNP Paribas, HSBC Securities, JM Financial, Motilal Oswal, and KFin Technologies.
Life insurers’ new business premium rises 14.8% in September
The life insurance industry recorded a 14.81 per cent growth in new business premiums (NBPs) in September 2025, rising to ₹40,206 crore from ₹35,020 crore in the same month last year, according to data from the Life Insurance Council. Year-to-date (YTD) collections grew from ₹1,89,214 crore to ₹2,03,668 crore.
Individual single premiums stood at ₹4,515.78 crore, up 4.99 per cent year-on-year, while individual non-single premiums rose to ₹10,837 crore, marking a YTD increase of 2.16 per cent. The group segment saw the strongest performance, with single premiums up 32.39 per cent to ₹22,574 crore and total group premiums up 35.23 per cent.
The industry also added 5,39,804 new individual agents during the period, registering a 3.71 per cent rise in total agent count. Insurers said the expansion reflects efforts to deepen coverage across underserved markets and increase financial inclusion.
PFRDA plans pension coverage for gig workers, farmers, and SHGs
The Pension Fund Regulatory and Development Authority (PFRDA) is working to expand India’s pension coverage to gig workers, Farmer Producer Organisations (FPOs), and Self-Help Groups (SHGs) while considering new investment options such as gold and silver for pension funds.
Chairperson S. Ramann said internal committees are assessing the proposal to include commodities in pension portfolios, though final approval rests with the PFRDA board. Speaking at the Global Fintech Fest 2025, he emphasised that pension funds must retain their long-term savings character and not mimic mutual funds.
PFRDA is encouraging pension funds to onboard digital platform workers from companies such as Uber and Urban Company, as well as FPOs with 300–500 members. Ramann warned that the absence of retirement planning could strain fiscal resources, stating, “No government can manage if people at 60–65 depend on the state for a dole.”
Private life insurers see demand rebound after GST exemption
Private life insurers are reporting early signs of a demand revival following the implementation of nil Goods and Services Tax (GST) on life insurance premiums. Companies said leads, website traffic, and sales conversions have improved since the exemption came into force.
The GST Council’s September decision to remove taxes on individual life policies and their reinsurance aimed to make protection products more affordable. Insurers have passed on the full benefit to consumers without altering product prices.
To offset the loss of input tax credit (ITC), estimated at ₹15,000 crore for the industry, insurers are renegotiating distributor commissions and cutting operational expenses. ICICI Prudential Life Insurance MD and CEO Anup Bagchi said, “The early trends indicate a positive response after the GST exemption. We have observed growth in website traffic, lead volumes, and conversion rates across product segments.”
Distributors see limited sales boost despite GST exemption on insurance
The rollout of zero Goods and Services Tax (GST) on individual life and health insurance policies has yet to trigger a significant surge in new policy sales, according to industry distributors. Most of the recent increase in business appears to come from deferred purchases and pent-up demand between the announcement and implementation of the tax exemption.
“It is too early to speak of a trend. There is a good flow of enquiries and some purchases from people who had completed their analysis but were waiting till September 22 to buy policies,” said Saurabh Vijayvergia, Founder and CEO of CoverSure. He added that while customers are not rushing to buy insurance solely because of the GST waiver, the change has accelerated decision-making among those already considering purchases.
The GST Council’s recent move exempted all individual life and health insurance policies, including term, unit-linked, endowment, and family floater plans, along with their reinsurance, to make coverage more affordable and improve penetration.
SBI Life reports 20% growth in new business premium in H1 FY26
SBI Life Insurance has reported a 20% year-on-year increase in its New Business Premium (NBP) for the first half of FY26, reaching ₹15,670 crore. This growth was driven by strong contributions across both individual and group segments. Individual New Business Premium stood at ₹9,140 crore, marking an 18% rise compared to the same period last year, while group premium rose 23% to ₹6,530 crore.
The company’s persistency ratio for the 13th month improved to 87.2%, showcasing strong customer retention. SBI Life also reported a solvency ratio of 2.24, well above the regulatory requirement of 1.50, indicating a robust financial position.
The insurer attributed the growth to its diversified product mix, consistent expansion in agency and bancassurance channels, and increased digital engagement. SBI Life continues to focus on delivering protection and long-term savings products to cater to evolving customer needs across urban and rural India.
ICICI Prudential Life passes full GST benefit to policyholders
ICICI Prudential Life Insurance has announced that it will pass on the full benefit of the GST rate cut to its customers. This move follows the recent decision by the GST Council to exempt individual life and health insurance policies from Goods and Services Tax. The insurer stated that the reduced premium rates would be applicable to both new and existing policyholders, leading to direct savings and increased affordability for life insurance coverage.
The company emphasised that this initiative aligns with its customer-first philosophy and the broader aim of increasing insurance penetration in India. By fully absorbing the impact of the GST exemption, ICICI Prudential Life expects to encourage more people to invest in long-term financial protection. The announcement comes at a time when industry stakeholders are under pressure to transfer the tax benefits to customers, even as they navigate input tax credit (ITC) implications on profitability.
LIC defends Adani investments, cites independent due diligence
Life Insurance Corporation of India (LIC) has clarified that its investments in Adani Group companies were made independently, following comprehensive internal due diligence procedures. In a statement responding to public concerns, the state-owned insurer noted that these investments were made in accordance with LIC’s existing investment framework, which includes rigorous evaluation of financials, industry trends, and risk assessment.
The clarification comes amid continued scrutiny of institutional investors’ exposure to the Adani Group, especially after allegations surfaced in the past over the group’s financial practices. LIC emphasised that its investments are meant to deliver long-term value to policyholders while adhering to regulatory and internal compliance norms. The insurer also highlighted that the Adani holdings formed only a small part of its diversified portfolio.
LIC reiterated its commitment to transparency and prudent investment strategy, aiming to reassure stakeholders about the safety and performance of its managed funds.
Canara HSBC Life outlines growth roadmap, eyes product innovation and tech adoption
Canara HSBC Life Insurance has unveiled a comprehensive growth strategy aimed at enhancing customer engagement, expanding distribution, and leveraging technology to streamline operations. The insurer plans to introduce a slew of innovative insurance products tailored to meet evolving consumer needs, particularly in the savings and protection segments. The move aligns with its ambition to strengthen its position in the competitive Indian life insurance market.
The company is also banking on digital transformation to boost efficiency and improve customer experience. Automation of backend processes, AI-based customer service tools, and advanced analytics for underwriting are among the key focus areas. Additionally, the insurer will continue to invest in training its agent network and deepen partnerships in bancassurance channels to widen reach.
Canara HSBC Life has expressed confidence that this multi-pronged strategy will help achieve sustainable growth while remaining aligned with regulatory expectations and customer-centric values.
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