Shares of Star Health and Allied Insurance Company skyrocketed 9.35 per cent, Niva Bupa Health Insurance Company zoomed 9 per cent, ICICI Prudential Life Insurance Company jumped 5.70 per cent, ICICI Lombard General Insurance Company rallied 5 per cent, Life Insurance Corporation of India climbed 5 per cent, HDFC Life Insurance Company went up 4.90 per cent and SBI Life Insurance Company surged 4.88 per cent on the BSE
New Delhi: Insurance stocks were in heavy demand on Thursday, with Star Health surging over 9 per cent, as life insurance and health insurance premia would come down as such products are now exempt from goods and services tax (GST).
Announcing the outcome of 56th GST Council meeting, Finance Minister Nirmala Sitharaman on Wednesday said all individual life insurance policies, whether term life, ULIP or endowment policies and subsequent reinsurance are exempt from GST.
Shares of Star Health and Allied Insurance Company skyrocketed 9.35 per cent, Niva Bupa Health Insurance Company zoomed 9 per cent, ICICI Prudential Life Insurance Company jumped 5.70 per cent, ICICI Lombard General Insurance Company rallied 5 per cent, Life Insurance Corporation of India climbed 5 per cent, HDFC Life Insurance Company went up 4.90 per cent and SBI Life Insurance Company surged 4.88 per cent on the BSE.
“While the direct beneficiaries include consumer, auto, cement, healthcare and insurance sectors, the second order beneficiaries in terms of growth will be retail banks & NBFCs,” Rahul Singh, CIO-Equities, Tata Asset Management, said.
All individual health insurance policies, including family floater policies and policies for senior citizens and reinsurance thereof will also be exempt from GST, she said.
Since its inception in July 2017, GST at the rate of 18 per cent is levied on premium paid towards health insurance and life insurance.
“We will make sure that companies pass on GST rate reduction and make insurance affordable for the common man and increase the insurance coverage in the country,” she said.
She further said the new rates would be effective from September 22, the first day of Navratri.
“Some of the key sectors that stand to benefit from this are insurance, FMCG, automobiles, agriculture equipment, cement, consumer durables, apparel, footwear, QSR, and retail,” Pranav Haridasan, MD and CEO, Axis Securities, said.