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India’s insurance sector is entering the July–September quarter of FY26 in a steadier position than it was a year ago. Recent changes in GST have brought down the cost of some insurance products, making them easier on the pocket for buyers. After months of regulatory changes, patchy demand and rising costs, the third quarter is shaping up as a phase where things stabilise rather than surge. Insurers across life, general and health segments are likely to see better business, even though pressure on margins has not fully eased.
GST tweaks help demand inch up
A big support this quarter comes from GST-related relief. Lower tax incidence has reduced the effective price of certain insurance covers, particularly in health and protection products. That has helped nudge demand at a time when households are still careful about discretionary spending.
In life insurance, this comes on top of a more settled base after last year’s changes to surrender value norms. Together, these factors are expected to support policy sales through the quarter.
Life insurance: term plans gain ground
Life insurers are likely to post steady growth, largely driven by higher demand for pure protection plans such as term insurance. More customers are choosing straightforward, lower-cost covers instead of complex savings-linked products.
For larger insurers, growth is expected to be supported by a better retail base and continued traction in group business. Even so, higher commissions and the lingering impact of GST input tax credit losses are likely to keep profitability under pressure.
Motor and health insurance are doing most of the heavy lifting for general insurers right now. Demand in the motor segment has stayed firm, helped by lower GST and steady vehicle sales, which has translated into better uptake of own-damage covers.
Health insurance is also seeing consistent demand. The pandemic has made people far more conscious of medical costs, and recent GST exemptions on some policies have made cover a bit easier on the wallet. Retail health plans are therefore selling better, while group policies remain under pressure as insurers compete fiercely for corporate clients who continue to push for lower premiums.