The recent GST reforms have created a mixed impact on insurance stocks. Earlier, policyholders were paying 18% GST on life and health insurance premiums, which made policies expensive but allowed insurers to claim input tax credit (ITC) on their costs. With the new rules, premiums have been exempted from GST, immediately lowering the cost for consumers and improving affordability. This move is expected to boost insurance penetration and demand, which is why stocks like LIC, HDFC Life, and SBI Life rallied after the announcement.

However, the flip side is that insurers can no longer claim ITC on major expenses such as agent commissions, marketing, and other services. This increases their operating costs and could squeeze margins. Analysts estimate that while customers may save up to 12–15% on premiums, insurers might face a 3–5% rise in effective costs. Some companies may absorb this hit initially to protect market share, while others could eventually reprice their products.

For investors, the reform is both an opportunity and a challenge. Cheaper premiums are positive for long-term growth, but short-term profitability could remain under pressure. Stocks are likely to stay in focus as the sector adapts to balancing higher demand with cost pressures, making the coming quarters crucial for gauging the true impact of GST changes on insurance companies.

Technical Levels for Major Insurance Stocks