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The life insurance industry witnessed a decline in new business premiums (NBP) in October 2025, primarily due to the recent Goods and Services Tax (GST) exemption on life insurance premiums.
According to a report by Systematix Research, the new business premium in October de-grew by 15 per cent on a month-on-month (MoM) basis but grew by 12 per cent on a year-on-year (YoY) basis. For the private sector, the total new business premium also decreased by 15 per cent MoM but recorded an 11 per cent growth on a YoY basis. The report stated, "The new business premium in the month of October 2025 de-grew by -15 per cent MoM but grew 12 per cent YoY." The latest decline in monthly premiums can be attributed to the GST exemption announced by the central government, which took effect on September 22, 2025. The GST on the life insurance premiums has been reduced from 18 per cent to nil. The government had approved this exemption after a GST rate rationalisation meeting to make health and life insurance policies more affordable for customers. With the exemption, customers are no longer required to pay GST on their insurance premiums. While this move aims to boost insurance penetration and affordability, it appears to have temporarily affected the momentum for premium collection in the month following the rule change. Despite the monthly decline, the year-to-date (YTD) growth for the financial year 2025-26 (FY26) remained positive. The YTD FY26 NBP growth stood at 8 per cent on a YoY basis, indicating sustained demand over the longer term. In terms of Annualised Premium Equivalent (APE), the total APE for the industry de-grew by 17 per cent MoM but grew by 21 per cent YoY. Overall, while the GST exemption may have caused a temporary slowdown in premium growth for October, the strong YoY and YTD growth trends suggest that the life insurance industry continues to expand steadily. (ANI)
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