Canara HSBC Life CFO expects premium growth at par with industry at 10 to 15 per cent in FY24

Canara HSBC Life Insurance company CFO Tarun Rustagi expects premium growth to be at par with the industry at 10 to 15 per cent in FY24.

In the last week of December, Rustagi told ETCFO in an interview that the insurance industry performed well in 2023, however, he expected muted premium growth by December. It is projected that the industry will have a 10-12 per cent growth. Although the industry performs better in the January-February-March quarter, de-growth in comparison to last year's March numbers is seen.

"Canara HSBC Life's premium growth would be in a similar range to the industry which is typically between 10-15 per cent. We will try to meet last year's February – March sales numbers, which were high due to tax changes in the 2023 Budget," he said.

Canara HSBC Life earned premiums worth Rs 232 crore last month, up 33 per cent from Rs 174 crore in November 2023. However, it was an 81 per cent drop on a year-on-year basis from Rs 1,222 crore in December 2022, according to data released by the Insurance Regulatory and Development Authority of India (IRDAI) released in January 2024.

The life insurance private sector is growing at the rate of 10.4 per cent from April 2023 to December 2023 with a premium of Rs 1.02 trillion.

According to a recent report by Swiss Re on the Indian insurance market, the premium growth moderated slightly from the previous year, reflecting adjustments to the post-COVID-19 era. The reinsurance company estimated life premium growth slowing to 4.1 per cent from 5.9 per cent in 2022, and the recent change in tax norms for high-ticket policies weighed on new premium growth. "We expect robust growth in life business (premiums up 6.7% in 2024‒28), supported by rising demand for term life cover by the middle-class and the country’s young population, and also increasing industry adoption of Insurtech," it stated.


Interim Budget 2024 Expectations

India Inc braces itself for the interim Budget 2024 which will be announced on February 1. Finance Minister Nirmala Sitharaman will be presenting her sixth Union Budget, rather than a full Budget ahead of the General Election in 2024.

"We do not expect big announcements/changes in this interim Budget, however, the expectation from the industry remains to provide relaxation on indirect taxes considering insurance is a necessary need and measures on the income tax specific exemptions," Rustagi said.

Before the GST was introduced, the tax on premium charges was paid as service tax at around 15 per cent. All these rates have now been replaced with GST and increased by 3 per cent as the premium now attracts 18 per cent GST.

What keeps the CFO awake at night?

"We have a stable business, strong distribution channels and committed and productive resources so not so worried about the growth of the business. However, the fast-changing technology landscape, price wars on some of the products and how we can remain relevant for our customers, shareholders and employees keep me always looking for solutions and options," Rustagi said.