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India's Insurance Sector Poised for Strong Q3 Growth on GST Tailwinds

India's insurance sector is anticipated to show a satisfactory operating performance in the third quarter of FY26, supported by favourable tailwinds from GST changes. Life insurers are projected to report healthy premium growth, with protection products and LIC benefiting significantly. General insurers are also expected to see robust growth in motor and health segments, though combined ratios remain elevated due to high costs. The report by Emkay Global notes that while growth momentum is strong, profitability metrics continue to face pressure from various headwinds.

Key Points: India Insurance Sector Q3 FY26 Outlook: GST Boosts Growth

  • GST changes boost premium affordability
  • Protection & term insurance see strong demand
  • Motor & Health segments drive general insurance growth
  • Profitability pressured by commission & regulatory costs
2 min read

India's insurance sector to deliver satisfactory performance in Q3 over GST-related tailwinds

India's insurance sector expects satisfactory Q3 performance with GST tailwinds boosting life, general, and health insurance premiums, though profitability faces pressure.

"Life insurance companies are projected to report healthy Annualised Premium Equivalent (APE) growth during the quarter - Emkay Global Report"

Mumbai, Jan 6

India's insurance sector is expected to deliver a satisfactory operating performance in Q3 FY26, supported by favourable GST-related tailwinds across life, general and health insurance segments, a report showed on Tuesday.

While premium growth momentum is likely to strengthen, profitability metrics are expected to remain under pressure amid GST input tax credit (ITC) losses, elevated commission payouts and regulatory adjustments, said the report by Emkay Global Financial Services.

According to the report, life insurance companies are projected to report healthy Annualised Premium Equivalent (APE) growth during the quarter, aided by improved affordability following GST changes and the normalisation of base effects after the implementation of revised surrender regulations.

Protection products are expected to be the key beneficiary of the GST tailwind, with increasing customer preference for term insurance driving volumes.

Life Insurance Corporation of India (LIC) is likely to post strong APE growth, supported by a favourable base in the retail segment and robust traction in group business, said the report.

General insurance companies are expected to report healthy Gross Written Premium (GWP) growth, driven primarily by strong momentum in the Motor and Health insurance segments.

The reduction in GST rates is likely to support new vehicle sales, thereby boosting growth in the Motor Own Damage segment.

Meanwhile, the retail health insurance segment is expected to see robust growth, supported by improved affordability following GST rate exemptions. However, the group health segment may witness relatively modest growth due to heightened competitive intensity, said the report.

Combined ratios for general insurers are expected to remain elevated during the quarter, largely due to higher commission payouts.

That said, select players may see marginal improvement in claims ratios.

Looking ahead, Emkay expects life insurers to sustain healthy APE growth momentum, driven by GST tailwinds and normalisation of base effects.

- IANS

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Reader Comments

R
Rohit P
"Satisfactory performance" but profitability is under pressure? Sounds like a mixed bag. The report mentions higher commission payouts – as a policyholder, I always wonder how much of my premium is going to the agent versus the actual cover.
A
Aman W
LIC showing strong growth is reassuring. It's a trusted name in every Indian household. My father has had a policy with them for 30 years. Hope the GST benefits are passed on properly to customers and not just eaten up by corporate margins.
S
Sarah B
The focus on health and motor insurance growth makes sense. With more cars on the road and rising medical costs, these are essential covers. The affordability angle is key for middle-class families.
K
Karthik V
While the growth numbers look good on paper, I hope the IRDAI keeps a close watch on the claims settlement ratio. Growth is meaningless if people face hurdles when they actually need to make a claim. That's the real test of the sector's health.
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Nisha Z
As a small business owner, group health insurance for my employees has become very competitive and expensive. The article mentions modest growth there – hopefully more competition will eventually bring prices down for us. 🤞

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