Proposed tax cuts to drag Indian insurers in short-term, says HSBC

PB Fintech

03/09/2025 09:26

** HSBC says standalone health insurers are likely to be more significantly impacted in the near term by proposed tax cuts due to their exposure to retail health, while multi-line insurers are expected to see minimal effects

** Star Health STAU.NS is most exposed to retail health, followed by Niva Bupa NIVA.NS and Care CARE.BO. Distributor PB Fintech PBFI.NS could benefit in medium- to long-term span

** Insurance premiums could fall by 6%–15% depending on the GST rate cut, and a reduction at the higher end may spur demand and reverse 1.5 to 2 years of inflation-driven hikes, HSBC says

** Adds that even without input tax credits, health insurance premium could decline by 7%-15%

** Firms may see near-term impact on combined ratios by 3%-6% as back book repricing could take 12–18 months

** HSBC estimates a complete GST exemption could lead to a yearly $1.2 bilion-1.4 bilion loss in revenue on premiums for the government

 (Reporting by Urvi Dugar)

 ((UrviManoj.Dugar@thomsonreuters.com))