From Premiums to Payouts: How GST Changes Are Reshaping Insurance Commissions

Insurers like Niva Bupa, Care Health, and ICICI Lombard have slashed agent and distributor commissions by 18% starting October 1, 2025, following the government’s removal of 18% GST on individual life, health, and accident insurance policies. This GST exemption, while benefiting customers by lowering premiums, also resulted in insurers losing eligibility for input tax credit (ITC) on GST paid for commissions and other expenses, putting pressure on their margins. To partly offset this ITC loss, insurers have restructured commissions as GST-inclusive, thus reducing payouts to agents. 

 

Key Highlights:

This strategic shift highlights the complex balance insurers must maintain between passing tax benefits to consumers and sustaining their distribution channels in a changing GST regime.

 

Source: The New Indian Express, ET Now, The Hindu Business Line