GS 3: EconomyPrelims

Life insurance segment growth in double digit, non-life stagnates amid GST cut, Pg18.

Life insurance soars 12.06% post-GST cut; non-life stagnates at 0.07% in October 2025, reveals IRDAI data.

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Key Highlights:

  • Life insurance new business premiums rose by 12.06% to Rs 34,007 crore in October 2025, compared to Rs 30,348 crore in October 2024.
  • The growth in the life insurance segment was driven by a recent GST waiver on individual life and health insurance premiums.
  • Non-life insurance segment remained nearly flat, with a marginal increase of 0.07%, reaching Rs 29,617 crore in October 2025.
  • Standalone Health Insurers (SAHIs) reported a 38.3% rise in premium underwritten, amounting to Rs 3,738 crore, following the GST cut.

Detailed Insights:

  • The life insurance sector's growth was primarily fueled by strong performance in the individual segment, particularly in non-single premium policies.
  • Life Insurance Corporation (LIC) experienced a 12.51% increase in premium income, reaching Rs 19,274 crore in October 2025.
  • Private life insurers collectively registered an 11.47% growth, with premiums totaling Rs 14,732 crore during the same period.
  • Non-life insurers, excluding SAHIs, showed a modest growth of 1.72%, amounting to Rs 25,464 crore in October 2025.
  • The GST exemption, effective from September 22, 2025, applies to individual life and health insurance policies, but group insurance policies continue to attract an 18% GST.
  • Agriculture Insurance Company reported a significant decline of 82.27% in gross premium underwritten, falling to Rs 312 crore in October 2025.
  • The life insurance sector is expected to maintain a positive trajectory, supported by regulations, innovative products, digital adoption, and stronger distribution networks.

Key Concepts Involved:

  • GST (Goods and Services Tax): An indirect tax levied on the supply of goods and services.
  • Premium: The payment made to an insurance company for coverage.
  • Underwriting: The process of assessing risk and determining insurance terms.
  • Reinsurance: Insurance purchased by insurance companies to reduce their own risk.
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