GST Waiver Fuels Massive Life Insurance Boom: Is Non-Life Insurance Stuck?

India's insurance industry witnessed a bifurcation in performance in October. The life insurance segment registered robust growth, with new business premiums soaring by 12.06% year-on-year to Rs 34,007 crore, up from Rs 30,348 crore in the previous year. This surge is largely attributed to the recent Goods and Services Tax (GST) exemption on individual life and health insurance premiums, which took effect on September 22, 2025, providing a significant stimulus to sales and customer engagement. In contrast, the non-life insurance segment exhibited a lacklustre performance. Gross premiums underwritten stood almost stagnant at Rs 29,617 crore, showing a marginal increase of just 0.07% compared to Rs 29,597 crore in the prior year. This weak showing occurred even as standalone health insurers (SAHIs) reported a substantial 38.3% premium growth to Rs 3,738 crore, highlighting broader weakness in other non-life categories. Life Insurance Corporation, the dominant player, saw its premium income rise by 12.51% to Rs 19,274 crore, while private life insurers collectively grew by 11.47% to Rs 14,732 crore. In the non-life space, insurers excluding SAHIs saw only a 1.72% growth to Rs 25,464 crore. New India Assurance posted a 17.65% growth, but Bajaj General Insurance experienced a significant decline of 50.51%. The GST exemption is specifically for individual policies like term life, ULIPs, endowment plans, and individual health insurance. Group insurance policies continue to attract 18% GST.

Impact: This news significantly impacts the insurance sector by highlighting the positive effect of regulatory changes (GST waiver) on life and health insurance sales, indicating renewed customer interest. The disparity between the life and non-life segments suggests potential challenges for general insurers, while life insurers are poised for continued growth. This trend can influence investor sentiment towards insurance stocks. Impact Rating: 7/10

Difficult Terms: * New Business Premiums: The total amount of premium collected by an insurance company from new policies issued during a specific period. * GST (Goods and Services Tax): A consumption tax levied on the supply of goods and services in India. * Gross Premium Underwritten: The total amount of premium an insurance company expects to collect for policies issued over a period, before accounting for reinsurance or other deductions. * Standalone Health Insurers (SAHIs): Companies that exclusively offer health insurance products, separate from life or general insurance. * ULIPs (Unit Linked Insurance Plans): Insurance products that offer a combination of insurance and investment.