Insurance agents, brokers might take home less after recent GST
Insurance agents and brokers might take home less after a recent GST change kicked in on September 22, 2025.
The tax on life and health insurance is now zero (down from 18%), but that also means insurers lose out on input tax credits they used to get.
With their costs going up, many insurers are considering cutting commissions for agents and brokers to balance things out.
Insurers are exploring staggered commissions and digital partnerships
To manage these higher expenses, some companies like New India Assurance and SBI General say they'll pass the full GST savings to policyholders.
Still, analysts at Motilal Oswal Financial Services estimate insurer costs have jumped by 4-5% because those credits are gone.
Plus, with a strict 30% spending cap set by IRDAI, insurers have limited options—so they're exploring things like staggered commissions and more digital partnerships to stay competitive without raising prices too much.