GST rate on insurance should be brought down: Tapan Singhel

Chandigarh, August 21 : Tapan Singhel, Managing Director and Chief Executive Officer of Bajaj Allianz General Insurance, one of the country’s leading private companies in the general insurance business, believes that the Central Government should consider bringing down the Goods and Services Tax (GST) on life and health insurance. Rates should be cut which will be beneficial not only for the companies of this sector but also for the general public.

Singhel is also Chairman of CII National Committee on Insurance and Pensions and Board Member of Institute of Insurance and Risk Management.  In a press conference here today, Singhel said that at present the GST rate on life and health insurance is 18 percent which is high and needs to be cut. He informed that the general insurance sector has demanded a reduction in this rate from the Central Government and the GST Council. Asked what could be a reasonable rate, he said there are 12 more slabs below the 18 per cent.  Any such reduction will be in the interest of expansion of insurance coverage and in general public in particular and also because insurance does not come under the ambit of luxury.

 According to him, the insurance sector has an important contribution in the development of the country. He claimed that 40 per cent of the country’s development expenditure comes from the insurance sector. Similarly, he says that due to lack of health insurance, about 10 crore people in the country go below the poverty line every year because due to any serious illness and lack of health insurance, people have to sell their houses, jewelry etc. But if there is health insurance, then the insurance companies can prove to be helpful in this difficult time.

He said that in the same way crop insurance has also proved beneficial for the farmers. In case of crop loss, the farmers are compensated with the sum insured. The effect of this has been that wherever farmers have taken crop insurance, there has been a decline in the incidents of farmer suicides.

On the question regarding insurance claims, he said that in case of an accident of the vehicle, if the insurance holder takes photographs of the vehicle and sends it to the company, then he gets his claim amount in just 20 minutes. But this is possible in a situation where there is no loss of life or injury etc. He said that artificial intelligence is proving to be very helpful in settlement of claims.

On the question of business expansion, Tapan Singhel said that after strengthening its presence in metros, tier 2 and 3 towns, the company is focusing on increasing the reach of its products to the rural parts of the country and in this regard, in the next one to one and a half years by installing at least 1000 hub and spoke. He said that the market share of the company in the total general insurance business of the country is about 8.5 percent and its year-on-year growth rate is about 35 percent. The company currently has presence in about one thousand cities and towns in the country and has about one lakh insurance agents and distributors and brokers.

The company’s Marketing Head Vikramjit Singh Bhyana was also present on the occasion.