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00:00Let's move on. We're going to talk to Mr. Anuj Mathur today, who's MD and CEO of Canva
00:12HSBC life insurance company. Welcome, Mr. Mathur. Thanks for joining in on NDTV Profit
00:19Talk to us. It's a pleasure having you on the show.
00:22My pleasure too. And thanks for inviting me for this discussion.
00:25Yes, definitely.
00:27I'm going to start off with, of course, what are your expectations on this budget with
00:34regards to life insurance sector? What is the industry? What are the troubles that the
00:39industry is facing and what kind of resolutions are you expecting this time?
00:43See, currently life insurance industry is doing pretty well. If you see the growth which
00:48the industry has shown in the last three months, it's upwards of 20%. So we are doing very
00:52well. And let me also give you the background. See, life insurance is one sector which gives
00:57long term guarantees, which contributes to the exchequer big time in terms of taxes,
01:02which contributes to the infrastructure development of the country. So this is one sector which
01:07is providing social security as well as helping the government in terms of infrastructure
01:12investment. So what we expect from the industry in return is that the tax structure should
01:17be rationalized. And few things will come from the budget and few things will come maybe
01:21outside the budget when the GST council is meeting, they're deciding. So specifically
01:26in terms of my expectation from the budget this time is that there'll be some relaxation
01:30in direct taxes. We have not seen any changes in the limit, which is there for the life
01:36insurance in last almost a decade. As far as I remember, nothing has moved. So that
01:41is one relaxation. It will definitely help grow the sector. Number two, in terms of taxation
01:47of the proceeds, currently annuity is very, very important segment. I think retirement
01:53is definitely a very, very promising segment. And that is where we expect that the annuity
01:59should be made tax free, because what you get in annuity is principal and some bit of
02:05earnings on that. So that is another expectation which I have that in the form of annuities,
02:10it should be tax free. That will definitely help. And also some relaxation in terms of
02:151010D. So some changes came in last budget. Maybe some relaxation can be given that will
02:21really help the industry to grow. We are contributing a lot to the exchequer in the
02:26infrastructure growth of the country. And we'd be happy to further kind of participate,
02:31increase our penetration if these things are there. I think public is really looking for
02:36some of these relaxations. And we look forward from the industry for this help coming from
02:40the government. Right. You just spoke about the taxation structures as well. In the last budget,
02:47there was some tax being now implemented on five lakh and above premium that's paid annually. Are
02:55you expecting specific changes to that? Should that reduce? What is the expectation? What's the
03:00demand there? It's a request actually, because we saw this change last year, which we have seen,
03:07particularly people who are looking at long term savings. And by the way, as I mentioned,
03:11insurance is the only segment life insurance which provide long term guarantees. So if this can be
03:17relaxed, that will definitely help because last year we saw that there was some impact because
03:21of this. So it's a request that if this can be relaxed a little bit, that will definitely help
03:26in terms of savings also. And in terms of measures that can be taken to boost penetration of life
03:35insurance, of course, it's still very low in a country like India. What kind of measures can
03:41the government take, maybe in terms of distribution or through maybe, yeah, of course, going through
03:51self-help groups in rural areas or anything else that you would suggest that the government can do
03:58here? Right. So first of all, regulator is actually doing a lot of work in this area in terms of
04:04increasing the penetration. There's this BIMA trinity, which IRDA has taken forward, which is
04:09BIMA SUGAM, BIMA VISTAR, BIMA VAHAK. And I'll just take maybe two minutes to explain this.
04:14These are some of the initiatives which are meant to kind of widen the network of insurance. So BIMA
04:19SUGAM is the IT platform, which the regulator is going to provide to all the companies and to the
04:24customers and to various stakeholders within insurance to increase the penetration. So that
04:28will help increasing the penetration. So rather than just face to face solicitation, people can
04:33actually go digital and buy insurance. So that is something which BIMA SUGAM will provide.
04:37Similarly, BIMA VISTAR is again an initiative where the regulator is trying to kind of
04:43allow various kinds of intermediaries to deeply penetrate into the country because tier four,
04:48tier three, tier four cities, I think that is where at times the penetration is not that high.
04:52So that will help. And BIMA VAHAK again will help in terms of the product which is there being
04:58available to masses. And BIMA VISTAR will actually help in terms of bundling of the products.
05:03So I think these things will definitely help. One more request which I have, if we really want to
05:08increase the penetration, currently the GST is a big hindrance, particularly when it comes to
05:13protection. Protection which is so basic is the applicable tax rate is 18%. So that is where
05:21if GST council can take our request and for pure protection at least if we can lower the GST rate,
05:28that will definitely help increasing the penetration across the country. So these
05:33are a few initiatives which if we can work upon along with the government will definitely help
05:38increasing the penetration in this country, where the penetration is hovering somewhere
05:42between three, three and a half percent. Right. Anything specific on the GST front
05:47currently, of course, that becomes a hindrance, the high rate of GST, but is there something in
05:53mind that you have in terms of that, any specific number? My request will be to kind of reduce the
06:00rate because if you look at other commodities, which are not even basic needs, they are taxed
06:06at the rate of 12% or even lower. So if protection can be at the rate of 5%, I think that would be a
06:13big boost for penetration that will definitely help because ultimately who's bearing the burden
06:17of this? The burden of this is going to the customers. So if we can actually rationalize
06:22the GST rate and it is completely the government's discretion, what they think is the right rate,
06:27any reduction from here will definitely help boosting the penetration in the country.
06:32And my request is at least for protection because that is where 18% is being charged,
06:36which is really high. Right. Mr. Mathur, can you also talk to us about the pricing of these policies?
06:42Do you see that rising from here on? Not really. I think, in fact, right now,
06:50we are looking at the new product regulations, seeing how we can absorb the impact of this and
06:55not impact the customer. So there are various measures which insurance companies are taking
06:59to see that the burden is not passed on to the customer. And I think industry will be
07:05reasonable is what I feel. Early days, but I think in the next three months, we'll see more clarity
07:10and hopefully I think the customer should not be bearing the burden of it.
07:14Point well taken. Thank you so much, Mr. Mathur, for joining us on the show today and
07:19for giving us those answers and the expectations of the life insurance industry has from the
07:24government this time, from the budget, of course. Thank you so much, Mr. Mathur.
07:29My pleasure. I'm looking forward to the budget day.
07:33Yeah, yes, definitely. And viewers, thanks for watching. But don't go anywhere. We have lots
07:38more lined up for you on any TV profits. Stay tuned.