GST cut hopes spark rally in insurance stocks; Niva Bupa Health Insurance jumps nearly 10% intraday

Listed health and life insurance stocks were in the spotlight today amid expectations of major cuts in Goods and Services Tax (GST) on insurance policies.

As per experts, GST on health and life insurance may be reduced to 5% or even granted a complete exemption. As a result, shares of insurance companies saw a significant intraday rally.

Insurance stocks witnessed strong market interest amid GST cut talks. Niva Bupa Health Insurance led the rally with a notable 9.7% rise, reaching a day high of ₹89.91 apiece. New India Assurance Company followed closely with a 9.0% increase, hitting ₹201.03 intraday high. Max Financial Services and ICICI Prudential Life also showed robust gains of 4.7% and 4.6%, reaching ₹1,674 and ₹655.9, respectively. SBI Life rose 3.8% to ₹1,912, HDFC Life gained 3.3% to ₹815, LIC India increased 3.0% to ₹915.2, and Go Digit General Insurance climbed 4.5% to ₹371.50.

In India, the Goods and Services Tax (GST) on both health and most life insurance premiums is currently set at 18%. This rate applies to various insurance products, including individual health plans, family floater policies, critical illness cover, and personal accident insurance. The 18% GST is charged on the entire premium amount and is included in the total payment made by the policyholders.

The insurance industry has long advocated for a reduction in this rate, citing concerns over affordability and the need to improve insurance penetration. Despite ongoing discussions and recommendations, the standard GST rate on these insurance premiums remains unchanged at 18%.