Indian Insurance Premium Growth Surges Over 20% in November Post-GST Cut

In November of FY26, both life and non-life insurance sectors in India experienced over 20% year-on-year premium growth, marking a significant milestone supported largely by the elimination of goods and services tax (GST) on insurance premiums. Life insurers saw new business premiums (NBP) increase by nearly 23% to ₹31,119.6 crore, while non-life insurers witnessed a 24.17% growth to ₹26,897.4 crore. The state-owned Life Insurance Corporation of India (LIC) notably recorded a 35% growth in new business premiums, surpassing private insurers who posted a 12.5% increase. The reduction of GST from 18% to zero on individual life and health insurance premiums has improved affordability, leading to an uptick in policy sales which rose 48.44% year-on-year in November. Analysts indicate that the insurance industry had quickly adjusted to the new tax regime, enabling insurers to refocus on sales, particularly boosting term insurance products. The favorable base effect contributed to the overall growth in premiums across segments. Non-life insurance also posted its highest monthly growth for the year, with general insurers growing 22.4% and standalone health insurance companies surging 36.12% in premium collections. Growth drivers include motor and crop insurance sectors, with private multi-line insurers outperforming their public counterparts in premium income gains. This growth trend continued through the April-November period, with life insurance new business premiums growing 9.8% and non-life premiums up by 8.01%. Despite strong premium growth, share prices for most listed insurers declined on the reporting day, influenced by recent gains leading to profit-booking and broader market weaknesses. This illustrates a disconnect between operational performance and investor sentiment in the insurance sector amid macroeconomic factors. The premium growth trajectory underscores the impact of regulatory tax changes on market dynamics, emphasizing how shifts in GST policies can significantly influence insurance affordability, consumer demand, and sectoral growth. This development is relevant for market participants and regulators assessing the sustained impact of tax reforms on the insurance industry's financial health and growth prospects.