Copyright thehindubusinessline
Private sector life insurer Canara HSBC Life Insurance will not have to take “any extreme steps” in terms of adjusting commissions for its distributors due to the new GST rejig as its commission rates are already on the lower end, said its MD & CEO Anuj Dayal Mathur. “In our bancassurance business, where we have our two partners, Canara Bank and HSBC, new business commission rates are already very moderate. So, there we are not contemplating any further adjustment due to GST. Our commission rates are already on the lower end. In the open market, where the commission rates are higher, we will adjust GST. On renewal business, we may kind of recover the GST. So that is the overall position on commission,” Mathur told businessline. Currently, for the insurance company, around 85 per cent of its business in terms of Annualised Premium Equivalent (APE) comes from Canara Bank and HSBC. It recently launched its agency channel as the company is expanding alternative distributional channels to have a full control on the distribution side. “Because of our favourable cost ratios we don’t have to take any draconian steps. There is no panic. We have already taken a view that for our bank insurance business, we are not going to reduce GST from the new business commission,” Mathur pointed out. Notably, as per the new GST norms, insurance companies will not be able to claim input tax credit on GST paid on inputs like commissions and brokerages. commission structures Asked about whether Canara HSBC Life will be changing its commission structure for renewal business, the MD said it will depend on how much the company will be able to offset the GST impact with various initiatives going forward. “We are not in a rush to kind of do something as our commission rates are pretty low,” Mathur stated. During the first half of this financial year, Annualised Premium Equivalent (APE) grew 11 per cent year-on-year at ₹1,092.3 crore. During the period, Value of New Business (VNB) stood at ₹2,14.3 crore, registering a 20.6 per cent y-o-y growth. VNB margin grew 150 basis points y-o-y at 19.6 per cent for H1FY26. The company said the impact of the GST exemption on life insurance policies on its VNB margin was 0.5 per cent for the first half. As its management has been taking actions to offset the loss on account of the input tax credit, the company expects that the VNB margin for this fiscal would broadly be range bound between 19.6 per cent and 20 per cent. “We are closely looking at our operating expenses. Wherever we have opportunity to rationalise it, renegotiation with the vendors is going very well. We are doing product mix restructuring, which means selling more protection plans. The demand has also increased, so that is helping us to improve the margin which will take care of some of the impact this year (FY26). With the distributors, we are on a case-to-case basis, discussing what can be done in terms of adjusting not adjusting, that is also going very well,” said Chief Financial Officer Tarun Rustagi. Published on October 28, 2025
