GST Relief Hits October Life Insurance Premiums, But Annual Growth Remains Strong

In October 2025, life insurance new business premiums fell due to a recent GST exemption. Despite a 15% monthly drop, premiums grew by 12% annually. The policy aims to enhance affordability but has temporarily affected growth dynamics. YTD analysis shows sustained demand and an 8% growth rate.

The life insurance sector faced a 15% drop in new business premiums (NBP) in October 2025, attributed to a new Goods and Services Tax (GST) exemption on life insurance premiums. This exemption has shifted consumer behaviors, as noted in a Systematix Research report.

While private sector NBPs also saw a 15% monthly decline, they achieved an 11% year-on-year increase. The report emphasized that despite a monthly downturn, October's figures were up by 12% compared to last year.

Following a GST rate rationalization meeting, the government removed the 18% GST on life insurance premiums effective September 22, 2025. This move aims to make insurance more affordable but has temporarily dampened premium collection for October. However, year-to-date growth remains at 8% annually, evidencing long-term demand.