GST will trigger transformation of insurance business: Study
23/08/2016 12:36
Technology will power the new wave of change for the Indian Insurance Industry, reveals the CII-EY report titled Insurer of the Future. The report recommends pursuing technology to improve the traditional insurance process and to re-configure the insurance business model.
The customer is at the center of digital transformations across the value chain and Insurance in India has moved from being a sellers’ market to that of a digitally driven buyers’ market, says the CII-EY report.
As a service industry, insurance has one single tax (service tax) with one administering authority (the Central Government). Under the dual GST structure, a significant impact on this industry would be the emergence of dual stakeholders in every taxable supply of service: the Government of the State where the supply is made and the Central Government, highlighted the report.
From dealing with a central service tax for pan-India operations, insurers will potentially start dealing with 38 taxes: 35 State GSTs (SGSTs) of the states and union territories, 1 Central GST (CGST) and IGST on inter-state supplies. When the tax regime changes with GST, insurers would need to focus on the following elements as part of their customer acquisition strategy: customers’ resident location (location of the service receiver); location of the acquiring distribution channel, policy issuance and servicing framework.
Process-readiness and technology-readiness to take on higher compliances and transaction-level reporting will help insurers smoothly transition to the GST regime. It will be essential to ensure that all transactions are appropriately mapped and measured, it said.
The report clearly indicates that the technological disruptions erupting in the Indian Insurance Sector will lead to a transformational change in the sector and will soon catapult it at par with the developed economies across the globe.
23/08/2016 12:36
The customer is at the center of digital transformations across the value chain and Insurance in India has moved from being a sellers’ market to that of a digitally driven buyers’ market, says the CII-EY report.
As a service industry, insurance has one single tax (service tax) with one administering authority (the Central Government). Under the dual GST structure, a significant impact on this industry would be the emergence of dual stakeholders in every taxable supply of service: the Government of the State where the supply is made and the Central Government, highlighted the report.
From dealing with a central service tax for pan-India operations, insurers will potentially start dealing with 38 taxes: 35 State GSTs (SGSTs) of the states and union territories, 1 Central GST (CGST) and IGST on inter-state supplies. When the tax regime changes with GST, insurers would need to focus on the following elements as part of their customer acquisition strategy: customers’ resident location (location of the service receiver); location of the acquiring distribution channel, policy issuance and servicing framework.
Process-readiness and technology-readiness to take on higher compliances and transaction-level reporting will help insurers smoothly transition to the GST regime. It will be essential to ensure that all transactions are appropriately mapped and measured, it said.
The report clearly indicates that the technological disruptions erupting in the Indian Insurance Sector will lead to a transformational change in the sector and will soon catapult it at par with the developed economies across the globe.
