Following the GST Council’s decision to eliminate the 18% tax on individual life and health insurance policies, Edme Insurance Brokers Ltd. (formerly Aditya Birla Insurance Brokers Ltd. or ABIBL) is actively collaborating with insurers to reassess product pricing. A senior official from Edme indicated that insurers are likely to pass on significant benefits from this tax cut directly to their customers.
Gaurav Gupta, Chief Operating Officer at Edme Insurance Brokers Ltd., explained in a recent interview that this GST reduction means insurers can no longer claim input tax credit. Previously, this credit on insurance premiums was utilized to cover costs such as brokerage, commissions, and various overheads.
Gupta clarified that the extent to which these GST benefits will reach consumers hinges on how insurers adjust their pricing strategies, now that input tax credit is no longer available. While a full pass-through might not occur, he assured that the most favorable options would be extended to policyholders.
He further noted that insurance companies will require some time, possibly a month or two, to finalize new pricing models, particularly for new policy offerings. However, the benefits of the rate cut are expected to be applied to policy renewals, albeit with potential adjustments to the renewal terms.
Gupta anticipates that once pricing is settled, the market penetration for individual policies will see an uptick, especially starting in January, a peak period when many individuals purchase insurance for tax planning purposes.
Jonika Jain, Chief Human Resources Officer (CHRO) at Edme Insurance Brokers, highlighted the company’s significant growth. Through its acquisition of UK-based UIB’s Indian operations and subsequent merger, Edme has risen to become India’s third-largest insurance broker. It now offers comprehensive insurance and risk advisory services, catering to businesses and individuals across commercial, reinsurance, and personal coverage sectors.
Jain also revealed ambitious future plans: Edme aims to double its workforce from 500 to 1,000 employees within the next five years and expand its international presence by launching operations in the UAE, UK, and Singapore.