Insurance Sector will Adjust to GST Rate

Insurance and Regulatory Authority of India (Irdai) chairman T S Vijayan has said that though the newly introduced goods and services tax (GST) has raised the tax rate for the insurance sector to 18%, the sector will adjust to it.

The Irdai chairman said that the general insurance sector witnessed a growth of 32%, while the life insurance segment saw a 26% growth in FY17. He expressed confidence that the sector will continue to grow at the same pace even in FY18, trying to allay the apprehension of insurance companies.

“GST of 18% is levied on the insurance sector, which is a hike from the earlier rate of 15% tax on insurance products. Though the higher GST rate would increase the burden, insurance industry will adjust to the new GST and will keep growing,” he said while speaking at a seminar on ‘Emerging Trends in Insurance Sector’ in Hyderabad on Tuesday.

The Irdai chairman also suggested that insurance companies come up with customised plans making use of big data and analytics in the coming days.