Private Insurers See 20% Growth Amid GST Reforms

Private life insurers reported a 20.2% YoY growth in individual APE amid GST reforms moving health and life insurance to a zero-tax bracket. The 'Sabka Bima Sabki Raksha Bill, 2025' aims to expand the insurance ecosystem, promising jobs and drawing new market players, while safeguarding policyholders' interests.

Private life insurers have recorded a robust 20.2% year-on-year growth in individual Annualized Premium Equivalent (APE), reflecting significant industry expansion. According to a report by Nuvama, the fiscal year to date indicates a rise in market share for private insurers, surging 164 basis points YoY to 72.4% in the individual APE sector.

The report indicated that GST exemption on individual businesses would bolster demand over the long term, but insurers must adjust pricing, processes, and channel strategies to counter any immediate margin impacts. In September 2025, sweeping next-generation GST reforms provided substantial relief to citizens, notably in the healthcare and insurance sectors.

Previously, the insurance sector was subject to an 18% GST, but the reform shifts them to a zero-tax bracket, broadening health and life insurance affordability and reach. Parliament passed the 'Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Bill, 2025' in December, a move hailed by Finance Minister Nirmala Sitharaman as a catalyst for attracting new insurers and creating employment.

With the Rajya Sabha's approval following a detailed response from the Finance Minister, the Lok Sabha enacted the bill. Sitharaman underscored that IRDAI requires insurance companies to maintain a minimum solvency ratio of 1.5, ensuring assets exceed liabilities by at least 50%. She affirmed that regulatory norms safeguard policyholder interests effectively.

(With inputs from agencies.)