MUMBAI: The GST removal has helped the life-insurance industry post double-digit monthly growth for the third consecutive month in November, with new-business premia increasing by 23% on-year to Rs 31,119.6 crore.
The robust 23% growth reflects a strong recovery from the 5.2% decline in August, and marking a notable turnaround from the 4.5% fall in November 2024, Care Ratings said in a note Thursday.
The rebound was driven by a surge in individual non-single policies and robust performance across both individual and group segments. A favourable base effect and a smoother adjustment following the GST waiver for individual life policies further supported this upswing, helping to maintain the industry’s growth momentum, Sanjay Agarwal, a senior director at the agency said.
LIC continued to lead the market, supported by strong momentum in both individual and group segments, while private insurers sustained double-digit growth. Individual non-single premiums grew notably, highlighting resilient recurring inflows, and the group business benefited from a revival in institutional activity. Although the annual renewal rate for group policies eased due to an exceptionally strong prior-year base, the sector’s overall trajectory remains positive.
Year-to-date, cumulative first-year premiums grew at a steady, sustainable pace, driven largely by private players, reflecting a return to normal growth following the temporary boost from recent regulatory changes.
In November, insurers saw a significant rebound in single-premium business, which grew 29.4% on-year, after a 19.8% decline the previous year. This recovery mainly reflects the normalisation of demand following the base effect from the implementation of the surrender-value regulation in late 2024, as well as more favourable positioning of individual single-premium plans.
Meanwhile, non-single premiums grew modestly by 14.3% on-year, due to a decline in group renewals, despite market preference for individual non-single products following GST waiver.
Private insurers notably strengthened their position in the individual non-single segment, while LIC maintained its dominance in single-premium business, supported by its strength in group business offerings, said Agarwal.
Individual life premiums surged 26.4% on-year, rebounding sharply from just a 7.7% increase a year earlier, driven mainly by strong growth in the individual non-single segment, where private insurers continued gaining market share.
Group premiums also increased by 20%, recovering from a low base, compared with a 13.1% decline in the previous year. Meanwhile, the proportion of single-premium business in total collections eased slightly, falling from around 70% in FY25 to 68% in so far in FY26, indicating a gradual shift towards non-single-premium products.
Individual non-single policies also increased by 48.5% on-year, reversing a 27.2% decline in the same month of the previous year, mainly driven by LIC, which saw a 69.8% rise, reflecting a low base effect, while private insurers achieved a healthy 22.8% growth.
The strong performance underscores a renewed upward trend in the individual recurring premium segment, supported by solid demand and expanded product offerings, said Agarwal, adding despite this surge, the total policy count for remains slightly below last year’s levels so far this fiscal, indicating that although cumulative volumes are still moderating, the recent rise suggests a recovery in policy uptake, further supported by the impact of GST waiver.
The industry’s annual premium equivalent (APE) increased 16.1% in November, slowing from the 19.9% growth a year earlier, yet still indicating a healthy rate of expansion. This improvement suggests a revival in underlying demand, supported by renewed customer interest following the GST waiver, along with strong growth in LIC and consistent momentum among private insurers.
According to Agarwal, “the life-insurance sector has made a strong rebound in November with APE growth accelerating to 16.1%, slightly below last year’s 19.9%, but still signalling that underlying demand is back, supported by renewed customer interest after the GST waiver. This relief has helped reignite engagement and boosted sales, especially for recurring premium plans. The surge in policy issuance is accompanied by broad-based growth in customer participation, indicating that the industry has overcome agency-led distribution issues following the change in surrender value norms introduced last year.
Looking ahead, he expects this positive momentum to continue over the medium term, underpinned by favourable regulation, innovative products, digital expansion, and stronger distribution networks.
According to Priyesh Ruparelia, a director with the agency, new business premiums growth of 23% to Rs 31,119.6 crore, is driven by robust demand across both individual and group segments, while group renewals softened, due to a strong base and regulatory recalibrations.
With private insurers deepening their regional footprint and with digital-first initiatives like Bima Sugam the market is well-positioned for a sustained recovery and long-term growth, Ruparelia concluded.