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

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.

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