Canara HSBC Life Insurance, MD and CEO Anuj Dayal Mathur | Photo credit:
Private sector life insurer Canara HSBC Life Insurance will not have to take “extreme steps” in adjusting commissions for its distributors due to the new GST change as commission rates are already on the low side, said MD & CEO Anuj Dayal Mathur.
“In our bancassurance business, where we have our two partners, Canara Bank and HSBC, the commission rates for new business are already very moderate. So there we are not considering any further adjustments due to GST. Our commission rates are already at the lower end. In the open market, where the commission rates are higher, we will adjust the GST. On renewal activities, we can recover the GST to some extent. So that is the general position on commissions,” Mathur shared. business line.
Currently, for the insurance company, approximately 85 percent of its revenue in terms of Annualized Premium Equivalent (APE) comes from Canara Bank and HSBC. It recently launched its agency channel as the company expands alternative distribution channels to have full control over the distribution side.
“Due to our favorable cost ratios, we do not need to take draconian measures. There is no need to panic. We have already taken the stand that we will not reduce GST from the new business commission for our bancassurance business,” Mathur pointed out.
Notably, under the new GST norms, insurance companies will not be able to claim input tax on GST paid on inputs such as commissions and brokers.
committee structures
Asked whether Canara HSBC Life will change its commission structure for renewal activities, the MD said this will depend on the extent to which the company will be able to offset the GST impact through various initiatives in the future.
“We are not in a hurry to do anything as our commission rates are decent,” said Mathur.
APE is growing
During the first half of this fiscal, the Annualized Premium Equivalent (APE) grew 11 percent year-on-year to ₹ 1,092.3 crore. During the period, the Value of New Business (VNB) stood at ₹ 2,14.3 crore, registering a growth of 20.6 percent YoY. VNB margin grew 150 basis points year-on-year to 19.6 percent in H1FY26.
The company said the impact of the GST exemption on life insurance policies on VNB margin for the first half was 0.5 percent.
As management has taken measures to offset the loss due to the input tax credit, the company expects the VNB margin for this budget to be roughly between 19.6 and 20 percent.
“We are looking closely at our operating costs. Wherever we have the opportunity to rationalize them, renegotiations with suppliers are going very well. We are restructuring the product mix, which means we need to sell more protection plans. Demand has also increased, so that helps us improve margins, which will absorb some of the impact this year (FY26). With the distributors we are on a case-by-case basis working to discuss what can be done to avoid modifying the impact. adjustments are also going very well,” says Chief Financial Officer Tarun Rustagi.
Published on October 28, 2025
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