As per the FTA outlines: The following principles should be applied in respect to determining which party may recover the VAT incurred (1) If the insurer provides a payment to the insured which is in the nature of compensation for costs incurred by the insured, the input tax in respect of the costs will be recoverable by the insured, (2) If the insurer incurs the cost of acquiring goods or services itself, then the input tax in respect of the costs will be recoverable by the insurer. It is clear that unless the insurance company is the recipient of services, recovery of VAT is not allowed for the insurance company.