Galaxy Health Insurance, the country’s youngest standalone health insurer, is estimating a 5–6% impact on its bottom line following the recent Goods and Services Tax (GST) rate cut, according to a senior company official.
“The GST rate cut has impacted all standalone health insurers more than general insurers. In our case, we estimate it to be roughly 5–6% on the bottom line,” G Srinivasan, MD & CEO, Galaxy Health Insurance, said while addressing the media here on Monday.
Govt’s move to exempt individual health insurance policies from GST
The government exempted individual health insurance policies, including family floater and senior citizen plans, from GST, which earlier attracted an 18% levy, with effect from September 22. While reinsurance premiums were also exempted from GST, insurers are unable to claim input tax credit on operating expenses and commission payouts, as the final health insurance product is now fully exempt from GST.
He, however, added that the 18% GST cut on health insurance is steep and will support health insurance growth over the long term. “People sitting on the fence will buy health insurance. The benefit will be seen in the coming months,” he said.
The general insurance industry recorded its highest growth so far this fiscal, posting a 24% year-on-year rise in premiums to ₹26,897.4 crore in November, driven by strong growth in health and motor insurance.
Galaxy Twin 360
Galaxy Health Insurance, backed by TVS Group’s Venu Srinivasan and the family of Star Health & Allied Insurance founder V Jagannathan, launched Galaxy Twin 360, a health insurance programme for young adults aged 18–45 years. The product offers comprehensive inpatient (IPD) coverage along with high-value outpatient (OPD) benefits and wellness services.
“This is our 12th product and we will continue to launch one product per month till we cover all basic product needs,” Srinivasan said. At present, Jagannathan holds a 75% stake in the company, while the TVS Group’s Srinivasan family holds the remaining 25%. TVS Motor chairman Sudarshan Venu is among the members of the company’s board of directors.
Galaxy’s Srinivasan said the insurer was started with ₹300 crore of capital and is currently “well capitalised”. “When our business growth requires more capital it will certainly be funded by the promoters,” he added.
Since its launch in October 2024, Galaxy Health Insurance has written ₹85 crore in premium income, covering 3.5 lakh customers. The company currently operates across eight states through 71 offices. “We are looking to close FY27 with ₹400 crore of premium,” Srinivasan said.
The insurer largely relies on its 15,000-strong agent network for distribution and plans to tap the bancassurance segment in the future.