Life Insurance Sector Gets a Boost from GST Waiver
India's life insurance industry demonstrated robust health in October 2025, registering a strong double-digit growth. The sector's new business premiums climbed to Rs 34,007 crore, marking a significant 12.06% increase from the Rs 30,348 crore recorded in the same month the previous year. This impressive performance is largely attributed to the government's decision to implement a zero percent Goods and Services Tax (GST) on individual life and health insurance policies, a move that has invigorated customer engagement and sales.
A Tale of Two Segments: Stagnation in Non-Life Insurance
In stark contrast, the non-life insurance segment presented a picture of stagnation. The gross premium underwritten in October 2025 was virtually flat at Rs 29,617 crore, compared to Rs 29,597 crore a year ago, reflecting a minuscule growth of just 0.07%. This lacklustre performance persisted even as a sub-segment, the standalone health insurers (SAHIs), reported a spectacular 38.3% surge in premium collection, which rose to Rs 3,738 crore, also benefiting from the GST cut.
When the performance of SAHIs is excluded, the growth figure for the remaining non-life insurers becomes a mere 1.72%, with premiums reaching Rs 25,464 crore in October. The data revealed sharp contrasts even within this segment. While public sector giant New India Assurance registered a healthy 17.65% growth, Bajaj General Insurance witnessed a drastic 50.51% decline.
Drilling Down into the Numbers and Expert Outlook
The life insurance growth was powered by a strong uptake in the individual segment, with non-single premium policies showing particularly improved demand. The state-owned behemoth, Life Insurance Corporation (LIC), reported a 12.51% growth in its premium income for October, which stood at Rs 19,274 crore. Private players kept pace, registering an 11.47% growth to reach Rs 14,732 crore, according to data from the insurance regulator, IRDAI.
Sanjay Agarwal, Senior Director at CareEdge Ratings, affirmed that the GST waiver provided a critical boost to sales. He noted that the sector's underlying momentum has returned to a healthy double-digit trajectory, signalling a revival in demand. CareEdge expects the industry to maintain this positive growth in the medium term, supported by favourable regulations, digital adoption, and stronger distribution networks.
The GST exemption, effective from September 22, 2025, applies to individual policies such as term life, ULIPs, endowment plans, and health insurance policies including family-floater and senior citizen plans. It is important to note that group insurance policies continue to be taxed at the standard rate of 18%.
In other notable data, the public sector Agriculture Insurance Company experienced a severe 82.27% decline in its gross premium underwritten, which fell to just Rs 312 crore in October 2025 from Rs 1,760 crore a year ago.
