“We have already passed on the full zero GST benefit to new retail health policyholders .The policyholders will save a lot in case of a long term health insurance policy. Though, it is early days to calculate exactly the higher cost of retail health portfolio without ITC, we believe it will be around three to five percent in line with the industry expectation,’’ Parthanil Ghosh, executive director, HDFC Ergo General Insurance on Tuesday
Mumbai: HDFC Ergo General Insurance has said without input tax credit (ITC), implementation of zero per cent goods and service tax(GST) in retail Health portfolio may raise the its cost of by three to five per cent.
“We have already passed on the full zero GST benefit to new retail health policyholders .The policy holders will save a lot in case of a long term health insurance policy. Though, it is early days to calculate exactly the higher cost of retail health portfolio without ITC, we believe it will be around three to five percent in line with the industry expectation,’’ said Parthanil Ghosh, executive director, HDFC Ergo General Insurance on Tuesday.
However, the insurers can factor in the advantages of cheaper cost of pharmaceuticals, implants and diagnostic services.
HDFC Ergo General Insurance currently has around Rs 9,000 crore of Health Insurance portfolio out of which almost 65 per cent premiums are retail. Health Insurance is the largest portfolio of the company.
Ghosh said his company is currently undergoing large scale restructuring which has resulted in the degrowth of its topline for sometime.
HDFC Ergo General Insurance total premium income has shrunk by 20 per cent year-on –year to Rs 5716 crore in the first five months(Apr-Aug) of the current fiscal.
“We are restructuring our loss making Motor and Crop portfolio to large extent. In another couple of months, the restructuring will be over and the company will return to its growth trajectory. Apart from restructuring , the new regulatory norms on booking long term policies have also impacted topline growth of the company,’’ said Ghosh adding that the total Crop insurance premium in the industry will fall by 30 per cent during the current yyear..
There is strong case for raising the third party motor premium as severity of accidents are rising though the number of accidents have not gone up . Besides, the claims in terms of awards from the third party motor covers are going up , he said.