Archive · 28 Oct 2025
Canara HSBC Life Insurance Navigates GST Changes Without Major Commission Adjustments
Imagine an insurance company that pays people to help sell its policies.
New tax rules called GST mean companies can't get back some of the money they pay in commissions.
Some insurance companies are worried this will cost them a lot of money.
However, Canara HSBC Life Insurance says they are not too worried.
Their boss explained that they already pay their salespeople fairly low commissions, especially when working with their partner banks.
So, they don't have to make big, scary changes to how they pay them.
They might make small adjustments for some sales and may try to get back some tax on renewed policies.
The company is also busy saving money in other ways and focusing on selling more popular types of insurance, like protection plans.
Even though the new tax rules did affect their profits a little bit, they expect to still make a good profit this year.
Canara HSBC Life Insurance anticipates no major adjustments to distributor commissions due to new GST norms, citing already moderate rates.
The company's bancassurance business, its largest revenue source, has commission rates considered 'very moderate'.
Adjustments for GST will be made in the open market, and recovery of GST on renewal business is being considered.
Canara HSBC Life Insurance reported an 11% year-on-year growth in Annualised Premium Equivalent (APE) to ₹1,092.3 crore in the first half of FY26.
The company expects its Value of New Business (VNB) margin to remain stable between 19.6% and 20% for the fiscal year, managed through expense control and product mix.
- Who
- Canara HSBC Life Insurance, its MD & CEO Anuj Dayal Mathur, and CFO Tarun Rustagi
- What
- Discussed the company's strategy and financial outlook concerning new GST norms impacting insurance commissions and business operations.
- When
- October 28, 2025 (Publication Date)
- Where
- Not specified, context implies Indian insurance market.
- Why
- To address potential impacts of new GST regulations on distributor commissions and profitability, assuring stakeholders of minimal disruption due to existing moderate commission rates and proactive cost management.
Canara HSBC Life's Stance
Potential Impact on Other Insurers
Commission Adjustments Due to New GST Norms
Canara HSBC Life's Stance
Canara HSBC Life Insurance's MD & CEO Anuj Dayal Mathur stated that due to their already moderate commission rates, especially in their bancassurance business (around 85% of APE), they do not anticipate needing to make significant or 'draconian' adjustments to distributor commissions. They plan to adjust for GST in the open market and may recover GST on renewal business.
Potential Impact on Other Insurers
Mathur indicated that other private sector insurance companies operating in an open architecture with higher commission rates face a 'big issue' with the new GST norms, which disallow input tax credit on commissions and brokerages, implying that many may need to make substantial changes.
Impact on VNB Margin and Mitigation Strategies
Canara HSBC Life's Stance
The company expects its Value of New Business (VNB) margin for the fiscal year to remain between 19.6% and 20%. They are mitigating the 0.5% VNB margin impact from GST changes through initiatives like closely monitoring operating expenses, renegotiating with vendors, and product mix restructuring (selling more protection plans).
Potential Impact on Other Insurers
The article implies that other insurers, potentially facing larger commission adjustments, might experience a more significant negative impact on their VNB margins if they cannot effectively offset the increased costs associated with the new GST regulations.
- Company
- Canara HSBC Life Insurance
- MD & CEO
- Anuj Dayal Mathur
- CFO
- Tarun Rustagi
- Business Mix (APE)
- 85% from Canara Bank and HSBC bancassurance
- H1 FY26 APE Growth
- 11% YoY to ₹1,092.3 crore
- H1 FY26 VNB Growth
- 20.6% YoY to ₹214.3 crore
- H1 FY26 VNB Margin
- 19.6%
- H1 VNB Margin Impact from GST
- 0.5%