Distributors agreed to bear ITC as GST relief boosts affordability, volumes, Niva Bupa’s MD and CEO

Krishnan Ramachandran, MD & CEO, Niva Bupa

Niva Bupa Health Insurance has entirely passed on the Input Tax Credit (ITC) burden to its distributors, who have accepted the shift, said Managing Director and CEO Krishnan Ramachandran, adding that the company sees this as a sustainable practice rather than a short-term adjustment.

“Passing on the ITC impact is not a burden but a realignment,” said CEO Ramachandran. “This is a win for customers through lower prices, and for distributors through higher volumes. The increased affordability is already expanding the addressable market.”

According to the MD and CEO, distributors have agreed to bear the ITC as the recent GST relief from 18 percent to nil is improving affordability and driving policy volumes. “They understand that lower prices will eventually translate into larger ticket sizes and more renewals, which will benefit them in the long run,” said CEO Krishnan Ramachandran.

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"The drop in GST has led to a significant demand flip, we’ve seen growth rates well above 50 percent in October alone”, he added.

In the pre-GST cut scenario, customers were paying Rs 118 for a policy priced at Rs 100. Now, they pay Rs 100, but their willingness to spend Rs 118 remains, Ramachandran said. “That means they can either upgrade to better coverage or renew their existing policy at the same price point, which preserves distributor income,” said the MD and CEO.

While the ITC debate is significant in the short term, Ramachandran said the broader focus should remain on affordability and market expansion. “ITC is a one- or two-quarter topic. Beyond that, we have the ability to raise prices if needed. But for now, volumes are strong enough that we don’t see the need,” he added.

Next Focus Areas

With the GST cut and rising demand, Niva Bupa plans to double down on growth in the coming quarters. Ramachandran said the company will maintain discipline in underwriting and claims management, while strengthening focus on technology and analytics.

“We recently went live with a new core system and have set up an AI lab to explore new use cases,” Niva Bupa Health’s top executive said. “Most importantly, we are maintaining a relentless focus on talent and execution.”

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The company expects the combined effect of affordability, technological adoption and disciplined operations to position it strongly in the health insurance space.

Ramachandran concluded that while the GST cut has provided a near-term boost, Niva Bupa’s long-term strategy remains centred on building a sustainable, technology-driven business model. “Our goal is to grow responsibly, expanding reach, improving affordability, and ensuring long-term value for both customers and distributors,” he added.